The Central government will have the power to intervene in airline ticket prices during extraordinary situations under a new set of aviation rules notified on October 31. The Bharatiya Vayuyan Niyam, 2026, will come into effect on January 1, 2027, replacing the Aircraft Rules, 1937.
Under Rule 192, the Centre can issue written directions to scheduled airlines to regulate fares if it considers intervention necessary in the public interest. Any such intervention must be proportionate to the circumstances and will remain in force only for a specified period.
The move comes amid concerns over rising airfares, driven partly by elevated crude oil and Aviation Turbine Fuel (ATF) prices. However, the new framework does not introduce a permanent cap on ticket prices or require airlines to seek government approval before setting fares.
No Routine Control Over Ticket Prices
Airlines will continue to determine ticket prices based on market conditions, demand and operating costs. The government can step in only when it considers an extraordinary situation serious enough to warrant intervention.
The rules do not clearly define what constitutes an extraordinary situation or specify a fare threshold that could trigger government action. The provision therefore gives the Centre temporary powers rather than establishing a fixed pricing mechanism.
India deregulated airline fare fixation in 1994, allowing carriers to set ticket prices independently.
Airlines Must Disclose Fare Breakdowns
The new rules also strengthen transparency requirements for passengers. Airlines will have to display the total amount payable during the booking process and on the ticket, with a separate breakdown of the charges.
The disclosures must include:
- Base fare
- Government taxes
- Airline fees and other applicable charges
- Cancellation charges
- Refund conditions
Airlines will also have to publish their tariffs on websites and other digital platforms. Scheduled domestic airlines must submit tariff details to the Directorate General of Civil Aviation (DGCA), which will monitor the fares.
Rules Follow Supreme Court Proceedings
The notification follows Supreme Court proceedings concerning allegations of arbitrary and excessive airfares. The Centre had informed the court in October that revised aviation rules were being finalised.
The new framework retains government powers to intervene in exceptional circumstances while allowing airlines to continue market-based pricing during normal operations. For passengers, the immediate change will be greater visibility into ticket charges, while the possibility of temporary government intervention offers a mechanism to address extraordinary fare spikes.
The rules will apply from January 1, 2027.
