**Executive Summary**
This document is the answer to Unstarred Question No. 2127 in Lok Sabha regarding the increase in domestic airfares, to be answered on February 12th, 2026. The Minister of Civil Aviation addresses concerns about increased fares, their causes, impact on passengers, and government actions. The government has taken note of increased airfare in early December, 2025 and has capped maximum airfare to protect passenger interest.
**Key Points / Main Content**
* **Government Response to Airfare Increases:**
* The Government has acknowledged the increased airfares in early December 2025 and has capped maximum airfare to protect passenger interest.
* Airfares are not regulated by the Government; airlines can set fares based on operational needs, adhering to Rule 135 of the Aircraft Rules, 1937.
* **Government Intervention in Exceptional Cases:**
* The Government generally refrains from regulating airfares to maintain market competitiveness.
* It intervenes in exceptional circumstances by redistributing capacity and imposing temporary fare caps during events like the Pandemic, festivals, and major flight disruptions.
* **Factors Influencing Airline Operating Costs:**
* Airline costs vary due to factors like Aviation Turbine Fuel (ATF) prices, foreign exchange rates, excise duties, Value Added Tax (VAT), and lease rentals.
* ATF accounts for 35% to 40% of total airline operating expenses.
* **Government Measures for Affordable Air Travel:**
* Proactive steps are being taken to make air travel more affordable.
* Measures include the enactment of the Protection of Interests in Aircraft Objects Act, 2025, rationalization of Central Excise Duty and GST on MRO, and reduction of VAT on ATF.
* The Regional Connectivity Scheme (RCS) - Ude Desh ka Aam Nagrik (UDAN) provides connectivity to underserved airports.
* **Transparency in Airfares:**
* The Directorate General of Civil Aviation (DGCA) has established a Tariff Monitoring Unit (TMU).
* The TMU monitors airfares on 78 selected routes to ensure airlines do not charge outside the declared range.
* This monitoring covers about 27% of domestic traffic.
**Impact Analysis**
**Airlines**
* **Impact**
* Airlines retain flexibility in setting airfares based on operational needs but must adhere to Aircraft Rules, 1937.
* Airlines may face temporary fare caps during exceptional circumstances, potentially impacting revenue.
* May benefit from government measures to reduce operating costs, such as lower interest rates and rationalized taxes.
* **Action Required**
* Comply with Rule 135 of the Aircraft Rules, 1937, when determining airfares.
* Adhere to any temporary fare caps imposed by the Government during exceptional circumstances.
* Declare airfare ranges.
**Passengers (Students, Senior Citizens, Patients, Middle-Income Travelers)**
* **Impact**
* Potentially experience high airfares due to market dynamics.
* Protected to some extent by government's capping of maximum airfare.
* May benefit from government initiatives to make air travel more affordable and enhance connectivity.
* **Action Required**
* Be aware of government regulations and initiatives aimed at making air travel more affordable.
**Government**
* **Impact**
* Must balance market competitiveness with passenger interests.
* Requires ongoing monitoring of airfares and strategic intervention in exceptional circumstances.
* **Action Required**
* Continue monitoring airfares through the DGCA's Tariff Monitoring Unit.
* Implement and enforce measures to make air travel more affordable, such as tax rationalization.
* Remain vigilant and prepared to intervene in exceptional circumstances with appropriate measures like fare caps and capacity redistribution.
Key Entities Referenced
Ministry of Civil Aviation: The primary ministry responsible for the government's response regarding domestic airfare increases.
Rule 135 of the Aircraft Rules, 1937: A regulation that airlines must adhere to when determining airfares.
Regional Connectivity Scheme (RCS) - Ude Desh ka Aam Nagrik (UDAN): A scheme focused on providing connectivity to un-served and underserved airports, aiming to make air travel more affordable.
Directorate General of Civil Aviation (DGCA): The civil aviation authority that has established a Tariff Monitoring Unit to oversee airfares.
Aviation Turbine Fuel (ATF): A key factor impacting airline operating costs and airfare prices.
GOVERNMENT OF INDIA
MINISTRY OF CIVIL AVIATION
LOK SABHA
UNSTARRED QUESTION NO. : 2127
( TO BE ANSWERED ON THE 12th February 2026 )
INCREASE IN DOMESTIC AIRFARE
2127. SHRI GOVIND MAKTHAPPA KARJOL
Will the Minister of CIVIL AVIATION
be pleased to state:-
(a) whether the Government has taken note of the sudden and steep increase in domestic
airline fares on several routes in recent times;
(b) if so, the reasons therefor along with the impact of Aviation Turbine Fuel (ATF)
prices, demand–supply dynamics, operational costs and airline pricing practices on such
increase;
(c) the impact of these fare hikes on passengers, particularly students, senior citizens,
patients and middle-income travellers; and
(d) the steps taken/proposed to be taken by the Government to regulate unreasonable
increase in airfares and protect the interests of air passengers?
ANSWER
Minister of State in the Ministry of CIVIL AVIATION (Shri Murlidhar Mohol)
(a) to (d): The Government has taken a note of increased airfare in early December, 2025
and has capped maximum airfare in order to protect passenger interest.
Airfares are not subject to regulation by the Government and airlines have the flexibility
to determine their airfares based on their operational needs, while adhering to Rule 135
of the Aircraft Rules, 1937.
The Government generally refrains from regulating airfares to maintain market
competitiveness, however, it remains vigilant oversight role, intervening in exceptional
circumstances by redistributing capacity across various sectors and imposing temporary
fare caps, such as during Pandemic, festivals like Maha kumb, Pahalgam incident &
recently massive Indigo flight disruptions.
Airlines operating costs are dynamic in nature and their individual component varies due
to multiple factors such as price of Aviation Turbine Fuel (ATF) in international markets,
foreign exchange rates, excise duties and Value Added Tax (VAT), lease rentals, etc. ATF
alone accounts for 35% to 40% of total operating expenses of airlines.The government is taking proactive steps to make air travel more affordable, such as,
enactment of the Protection of Interests in Aircraft Objects Act, 2025 to lower interest
rates and lease rentals, rationalization of Central Excise Duty & GST on MRO
components and contracts, and reduction of high VAT on ATF by requesting States/UTs,
providing connectivity to un-served and underserved airports of the country through
Regional Connectivity Scheme (RCS) - Ude Desh ka Aam Nagrik (UDAN).
In order to enhance the transparency in airfare, Directorate General of Civil Aviation
(DGCA) has set-up Tariff Monitoring Unit (TMU) that monitors airfares on selected 78
routes on a random basis by using airlines websites on monthly basis to ensure that the
airlines do not charge airfares outside the range declared by them. This covers about 27%
of the domestic traffic.
******