Amid IndiGo-led price spike, Naidu rules out annual fare cap, says deregulation drives aviation growth

Aviation Minister Ram Mohan Naidu on Friday told the Lok Sabha that capping airfares year-round is neither practical nor in the long-term interests of the civil aviation sector, emphasising that a deregulated market ultimately keeps fares competitive and benefits passengers.Naidu said airfares naturally rise during festive seasons due to route-specific demand spikes, and such fluctuations “cannot be capped for an entire year.” He added that deregulation, introduced to open up the market and encourage more players has been key to aviation growth in countries worldwide. “When demand and supply operate freely, the biggest beneficiary is the passenger,” he said.Responding to a private member’s bill seeking fare regulation against the backdrop of the IndiGo crisis, Naidu reiterated that keeping the sector deregulated remains essential for growth. However, he underlined that this does not give airlines a free hand.“Even in a deregulated market, the Aircraft Act gives the Centre the authority to intervene in extraordinary situations to prevent misuse, including capping fares,” he said, noting that the government recently introduced a fare slab to curb “opportunistic pricing” after widespread flight cancellations.The minister highlighted multiple instances where the government exercised this power, during the Covid-19 crisis, the Maha Kumbh, the Pahalgam terror attack, and most recently the IndiGo disruptions.Naidu also cited the ‘Fare Se Fursat’ initiative, launched with the Alliance of Airlines, under which fixed fares apply on 25 routes, including those in the Northeast and southern states.He stressed that fare control “is not a one-way solution,” as the government must protect the financial viability of airlines, airports and the wider aviation ecosystem.Countering criticism over rising ticket prices, Naidu said airfares in India have fallen significantly in real terms. “When adjusted for inflation, airfares in India have seen a 43% reduction based on the Consumer Price Index. The US saw a 23% drop, China 34%, but India’s decline is the highest,” he said.The government, he added, has also issued airlines a tariff sheet listing upper and lower fare limits and directed them to display this clearly during ticket booking.



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