The Centre has clarified that it does not intend to interfere with market-driven airfare pricing, despite upcoming rules under the Bharatiya Vayuyan Adhiniyam, 2024. A government official told The Economic Times that airfares would continue to be determined by demand and supply, with intervention reserved for extraordinary circumstances such as natural calamities or major disruptions.
The clarification followed the Centre’s submission to the Supreme Court on Friday that the rules governing airfares under the legislation had received administrative approval and would be published within two weeks. The announcement triggered speculation about broader government regulation of ticket prices and led to a sharp decline in airline stocks.
According to the official, the proposed framework would empower the government to impose airfare caps during exceptional situations to prevent excessive financial hardship for passengers. Such intervention would be intended to protect the public during emergencies rather than alter the normal functioning of the aviation market.
Under the proposed rules, airlines would be required to submit their fare structures to the Directorate General of Civil Aviation (DGCA) for approval one month in advance. Carriers would also have to display their approved fare structures on their websites, increasing transparency around ticket pricing.
The DGCA would closely monitor compliance with the new requirements. Airlines would not be permitted to charge fares exceeding the highest fare bucket submitted to the regulator, according to the official. The framework is expected to strengthen regulatory oversight while establishing clearer requirements for airline pricing practices.
The proposed rules come amid wider attention on airfare affordability and the government’s role in protecting passengers during periods of disruption. While routine ticket prices would remain market-driven, the provision for exceptional intervention would give the government a mechanism to address situations in which sudden disruptions or natural disasters cause passenger hardship.