The Centre has notified new rules allowing it to intervene in airline ticket prices in extraordinary situations and in the public interest. The development comes amid concerns over high airfares, against a backdrop of continued increases in crude oil and Aviation Turbine Fuel (ATF) prices. The Bharatiya Vayuyan Niyam, 2026, notified by the Union Ministry of Civil Aviation, will take effect on January 1, 2027. Under the Bharatiya Vayuyan Niyam, 2026, the Centre can issue directions to airlines on fares if it considers intervention necessary in an extraordinary situation. Such directions must be proportionate to the circumstances and remain in force only for the specified period.
Rule 192 of Bharatiya Vayuyan Niyam
Under Rule 192, airlines operating scheduled air services must determine their fares based on factors including the cost of operations and submit tariff details to the Directorate General of Civil Aviation (DGCA).
The rules state that the government may issue written directions if it believes an extraordinary situation has arisen and intervention is necessary in the public interest.
Under the new rules, airlines must publish their fares on websites and other digital platforms to ensure transparency and keep passengers informed. The DGCA will monitor the tariffs set by scheduled airlines.
Airlines to provide pricing breakdowns
Airlines will also have to provide a separate breakdown of the base fare, taxes, fees, cancellation charges, refund conditions and other applicable charges. India deregulated airline fare fixation in 1994, allowing carriers to determine ticket prices based on market conditions. The Civil Aviation Ministry has maintained that airlines generally set fares according to demand, operating costs and the time of booking, with different pricing bands available for passengers.
Under the earlier Aircraft Rules, 1937, Rule 135(4) empowered the DGCA to issue directions if it found excessive or predatory pricing or oligopolistic practices in the aviation sector.
While the newly notified Rule 192 retains the provision for monitoring airline tariffs, it does not specifically list excessive or predatory pricing and oligopolistic practices as grounds for government intervention.
The new framework, however, gives the Centre powers to issue directions on airline fares in extraordinary circumstances, subject to the conditions specified in the rules.
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