Indian govt removes cap on domestic airfare

India's Civil Aviation Ministry has removed the cap of Rs 18,000 on domestic airfares from March 23 as jet fuel prices rose due to the West Asia war.

The ceiling on domestic airfare was imposed in the wake of widespread cancellation of flights of India's largest airline IndiGo in December last year.

The Ministry order of March 20 to revoke the cap on airfare comes at a time when airlines are facing significant operational disruptions in international routes due to the West Asia conflict.

The Ministry said the cap was introduced to contain an "abnormal surge" in ticket prices and protect passenger interests during a period of constrained capacity.

However, it said both capacity and operations across the aviation sector have normalised, including staffing issues that had contributed to the spate of mass cancellation of flights by IndiGo.

Air carriers sought the lifting of the fare cap arguing they have been operating services on longer routes to Europe and North America due to airspace restrictions, resulting in higher fuel consumption and operational costs.

Earlier this month, Indian carriers imposed aviation turbine fuel surcharges on domestic and international routes as costs climbed.

While lifting fare caps, the Ministry order cautioned the carriers against  "excessive or unjustified surge in fares during periods of peak demand, disruptions or exigencies" and said fare caps or other interventions can be re-introduced "if required in public interest."