Civil Aviation Minister Ram Mohan Naidu Rules Out Year-Round Airfare Caps, Emphasizes Deregulation

New Delhi, Dec 2025 : Civil Aviation Minister Ram Mohan Naidu on Friday told the Lok Sabha that it would not be practical for the government to impose airfare caps throughout the year in India’s deregulated aviation market, which has allowed the sector to grow rapidly and ultimately benefit consumers.

Responding to a private member’s bill seeking to regulate airfares amid the recent IndiGo operational disruption that sent ticket prices soaring, Naidu stressed that the principle of deregulation remains key. “If we want the civil aviation sector to grow, the foremost requirement is to keep it deregulated so that more players can enter the market,” he said.

The minister explained that airfare spikes, particularly during the festive season, are seasonal and route-specific. “Airfares usually rise during festive periods because of increased demand on certain routes at particular times. These fluctuations are natural, and it is not feasible to cap fares for an entire year on any sector. Market demand and supply regulate airfares effectively,” Naidu added.

Naidu pointed out that regulating fares is not a one-way solution. The government must consider the long-term sustainability of the aviation ecosystem, including airlines, airports, and the broader operational network. Countries experiencing rapid aviation growth typically have deregulated markets that encourage competition and allow more operators to enter the sector.

Highlighting the role of competition, the minister said that passengers benefit over time as airlines compete, driving fares down. “We also have statistics to show that compared with other countries, the rate of increase in India’s airfares is actually negative,” he noted.

At the same time, Naidu stressed that the Centre retains powers under the Aircraft Act to intervene in exceptional situations to protect passengers. He cited examples such as the Covid-19 pandemic, events like the Mahakumbh, disruptions in the Pahalgam–Srinagar sector, and the recent IndiGo flight issues, where the government stepped in to curb sudden fare spikes.

He also referred to the ‘Fare Se Fursat’ scheme, launched in collaboration with the Alliance of Airlines, which fixes fares on 25 strategic routes, including Northeast and South India, as an example of targeted intervention.

The minister emphasized that long-term capacity expansion is the key to addressing recurring price spikes. By increasing seat availability, supply constraints can be eased, ensuring fare stability while maintaining the benefits of a competitive, deregulated aviation market.

Naidu concluded that the government’s approach balances passenger protection with the need to maintain a dynamic, growing civil aviation sector, underlining that deregulation, competition, and targeted interventions are central to sustainable airline growth.