A Brief History of Fare Caps
The government's system of airfare caps wasn't a permanent fixture. Price bands were temporarily introduced in December 2025 following widespread flight disruptions and cancellations that caused a sudden, sharp spike in ticket prices. The Ministry of Civil
Aviation stepped in to regulate fares, establishing a floor to protect financially stressed airlines and a ceiling to shield passengers from exorbitant prices during a period of market instability. For example, fares for longer domestic routes of over 1,500 km were capped at ₹18,000. The measure was always intended to be temporary, designed to stabilize the market until operations returned to normal.
Why the Government Removed the Price Limits
By March 2026, the government determined that the aviation sector had stabilized, with flight capacity largely restored. Consequently, the Ministry of Civil Aviation withdrew the fare caps, effective March 23, 2026, returning the industry to a free-market model. This decision was also influenced by pressure from airlines, which were facing rising operating costs, particularly due to volatile Aviation Turbine Fuel (ATF) prices driven by geopolitical tensions in West Asia. Airlines argued that the caps were restricting their ability to manage revenue and offset these increasing expenses. The removal allows carriers to once again use dynamic pricing, where fares change based on real-time demand and supply.
The Impact on Festive Season Fares
For festive flyers, the absence of a price ceiling means one thing: the potential for significantly higher ticket prices, especially for last-minute bookings. With the government confirming it will not impose caps for the upcoming festive season, prices will be dictated purely by demand. Experts predict that last-minute fares on high-traffic routes could see a notable jump. Already, prices for travel around Durga Puja and Diwali are showing a sharp increase, with some routes to Kolkata seeing a 71% spike for peak days. For example, return fares on major routes like Delhi-Hyderabad and Delhi-Kolkata for the Diwali weekend are already hovering around ₹17,000-₹18,000. This trend is driven by high demand and rising ATF costs, which make up 40-43% of an airline's expenses.
Government's Stance and Airline Monitoring
While price caps are off the table, the government hasn't given airlines a complete free hand. Civil Aviation Minister K Rammohan Naidu has stated that the ministry will advise airlines to keep fares at a 'reasonable level' during the festive period. The Directorate General of Civil Aviation (DGCA) has been tasked with maintaining rigorous oversight on airfares and has asked airlines to augment capacity to meet the surge in demand. In response, carriers like IndiGo, Air India, and SpiceJet have announced hundreds of additional flights for the festive season. However, the government’s approach relies on engagement and advisories rather than direct price controls.
How to Fly Smarter This Festive Season
In this new no-cap environment, planning is more critical than ever. The single most effective strategy is to book your tickets well in advance, ideally 60-90 days before your travel date. Fares see their sharpest rise in the final 30 days before a major festival. Flexibility with travel dates can also lead to significant savings; flying on the day of Diwali itself can be 20-40% cheaper than travelling on the weekend right before it. Similarly, returning a few days after the peak return rush can cut costs. Using fare comparison websites and setting up price alerts can help you track fares and book when prices dip. Being open to flying into nearby smaller airports can also sometimes yield cheaper options as demand is lower compared to major hubs.
