Central government announces new rules to control air ticket prices

New rules have been announced by the Union Ministry of Civil Aviation, under which the Central government will be able to intervene in the air ticket prices of airline companies in extraordinary circumstances and in the public interest. According to NDTV's report, this step has been taken amid concerns over rising airfares due to high prices of crude oil and aviation turbine fuel i.e. ATF.

This notification has been issued by the Union Ministry of Civil Aviation under the Indian Aircraft Rules, 2026. According to these new rules, if the government feels that an extraordinary situation has arisen and it is necessary to intervene in the public interest, the Central government can give direct directions regarding fares to the airlines. However, these types of directions should be proportionate according to the prevailing circumstances and will remain in force only for a specified period.

Under these new rules, as per rule 192, airlines operating scheduled air services will have to fix their fares taking into various factors including operational costs and submit the details of these fares before the Directorate General of Civil Aviation i.e. DGCA. DGCA will continuously monitor this tariff fixed by scheduled airlines. Apart from this, it has been made mandatory for airlines to publish fares on their website and other digital platforms to maintain transparency and keep passengers informed.

This notification further strengthens the requirements for transparency in ticket prices. According to these rules, it is mandatory for airlines to show the total amount to be paid by passengers during the booking process and on the ticket. Along with this, airlines will have to give a separate breakdown of base fare i.e. basic fare, taxes, fees, cancellation charges i.e. cancellation fees, refund conditions and other applicable charges. These rules especially make a clear distinction between taxes payable to the government and fees collected by airlines for services or facilities provided to passengers.

It is noteworthy that in the year 1994, the airline fare fixation process was deregulated in India so that airlines can decide ticket prices based on market conditions. This matter has been maintained by the Ministry of Civil Aviation that airlines generally decide fares based on demand, operating cost and booking time, in which different price bands are available for passengers.

Under the earlier Aircraft Rules, 1937, rule 135(4) gave the DGCA the power to issue guidelines if excessive or predatory pricing i.e. predating pricing or oligopolistic practices were seen in the industry. However, the newly notified rule 192 retains the provision to monitor airline tariffs, but it does not specifically list excessive or predating pricing and oligopolistic practices as the basis for government intervention. Despite this, this new framework provides the Central government broad powers to issue orders regarding airline fares in extraordinary circumstances subject to the conditions laid down in the rules.