Industry stakeholders confirmed that the government is considering additional measures to support Indian carriers
| Photo Credit:
FRANCIS MASCARENHAS
Speaking to businessline, industry sources said, “After removing airfare caps, there is a discussion on lowering airport fees for parked aircraft that were earlier deployed to the Gulf region.”
Gulf routes, which account for a significant share of international flights for most Indian carriers, have been disrupted for close to a month.
Industry stakeholders confirmed that the government is considering additional measures to support Indian carriers.
Meanwhile, the Centre has removed temporary airfare caps, offering much-needed relief to cash-strapped airlines grappling with surging fuel costs and operational pressures.
The decision comes days after India-based carriers warned of potential flight cuts, fleet groundings, and job losses, citing mounting financial strain driven by high aviation turbine fuel (ATF) prices, a weak rupee, and high airport charges.
Greater flexibility
Notably, industry sources said the removal of fare caps will allow airlines greater flexibility to price tickets in line with market conditions, enabling a partial pass-through of rising input costs.
Airlines had earlier flagged to the Ministry of Civil Aviation that regulatory constraints on fares were exacerbating losses at a time when operating expenses have surged sharply.
Besides, they had sought relief from high ATF prices, which remain a key concern. Jet fuel prices across metro cities rose by nearly six per cent in the latest revision earlier this month.
Consequently, airlines have imposed fuel surcharges on both domestic and international routes from March 2026, citing rising ATF prices and high fuel taxes.
“The move to remove the fare cap provides critical headroom for airlines to manage yields better, especially during peak travel periods,” a senior industry executive said.
Furthermore, the decision assumes significance as carriers prepare for the peak summer travel season, even as geopolitical tensions in the Middle East continue to keep global crude oil markets volatile.
Industry observers noted that any sharp increase in ticket prices could impact passenger demand, particularly on price-sensitive domestic routes.
“The recent government notification scrapping temporary airfare caps does not give airlines a free hand to charge arbitrarily. Airlines have already raised fuel surcharges, and such surcharges only cover shocks arising from the rise in fuel prices,” said Mark Martin, Founder and CEO of Martin Consulting.
“Fares will continue to be closely monitored by the regulator, which is a progressive step by Minister Naidu. Besides, any high airfares will be detrimental to airlines in a price-sensitive market like India.”
Published on March 22, 2026