Govt Rules Out Year-Round Airfare Caps, Cites Demand Swings

• Govt says annual airfare caps not feasible due to seasonal demand fluctuations.
• Naidu says airlines instructed to add flights, increase capacity during peak periods.
• IndiGo crisis prompted temporary distance-based fare cap earlier this month.
• India exploring manufacturing regional aircraft with global partners.

GG News Bureau
New Delhi, 12th Dec: Civil Aviation Minister K. Rammohan Naidu told the Lok Sabha on Friday that the government cannot impose a year-round cap on airfares, citing seasonal fluctuations in demand and the operational realities of India’s aviation ecosystem.

Responding to concerns over steep ticket prices—especially during festivals—and industry-wide disruptions triggered by IndiGo’s recent operational meltdown, Naidu said airfare spikes are driven by predictable demand surges. “We cannot cap airfares for the entire year,” he said. “During festive seasons, demand increases and fares go up. We have asked airlines to increase their capacity during these busy periods.”

The minister said airlines have been instructed to add more flights, expand routes, and ensure adequate seating capacity so fares remain “within an adjustable and reasonable range.” He added that the government has enhanced connectivity during peak seasons to give passengers more options.

The remarks came during a debate on a private member’s resolution seeking regulatory measures on domestic airfare, which Congress MP Shafi Parambil later withdrew.

Naidu stressed that a deregulated market remains crucial for the civil aviation sector’s growth. “If we want aviation to grow, the first requirement is to keep it deregulated so more players can enter the market.” However, he clarified that deregulation does not mean the government lacks oversight authority. “In extraordinary circumstances, when fares rise abnormally, the government can intervene.”

Earlier this month, the ministry imposed a temporary distance-based fare cap following widespread cancellations by IndiGo. The minister reiterated that domestic ticket pricing remains “on par with other nations.”

Naidu also revealed that state-owned Alliance Air has begun a three-month pilot scheme offering fixed-fare seats. Depending on its results and passenger feedback, similar frameworks may be considered for private carriers.

The minister identified aircraft availability as a major bottleneck, noting that Indian airlines have over 1,700 aircraft on order, but global supply chain delays continue to impede deliveries.

He highlighted discussions underway to manufacture aircraft domestically: “This government has taken a stance—we are not going to wait for aircraft to be built abroad. We want a Made-in-India aircraft.”

Talks are ongoing with Russia’s Sukhoi for the SJ-100 regional aircraft, with HAL already signing an MoU for technology transfer. India is also in discussions with Brazil’s Embraer to bring production to Indian soil.

Naidu concluded that while airfare regulation is complex, the government is working to ensure affordability, capacity expansion, and long-term aviation self-reliance.