According to the Directorate General of Civil Aviation (DGCA), average air fares have gone up by 20.5% between domestic routes on June 2026 compared to March 2025 across 72 routes.
The ministry had earlier explained that the factors affecting the airline operating cost are dynamic ones such as Aviation Turbine Fuel (ATF) prices, foreign exchange rates, excise duty, Value Added Tax (VAT) and aircraft lease rentals when responding to the question in Parliament.
The ministry pointed out that ATF’s expenses at air carriers represent almost 35%-40% of an airline’s operational expenses which are some of the major factors for ticket price escalation.
At the same time, tensions over the war in West Asia have resulted in increased prices of ATF reportedly by over 100%, leading several domestic airlines to rationalise their operations by cutting down their frequencies on specific routes.
To enhance affordability the Centre emphasized certain reforms such as enactment of the Protection of Interests in Aircraft Objects Act, 2025 for decrease in lease rental costs and borrowing by airlines. Other measures involve rationalising the GST and excise duties on Maintenance, Repair and Overhaul (MRO) activities and encourage states to cut down on the VAT levy on ATF.
In addition, the ministry said fares on 78 selected domestic routes were under monitoring from time to time by the DGCA’s Tariff Monitoring Unit (TMU) which checks the fares declared through airline websites that the airline may be charging prices outside the tariff bands.
Further, the government has imposed a 25% maximum price hike for ATF prices over the base price of March 1, 2026 for April and May 2026 in order to provide cushion to the airlines and passengers.