Business
Domestic Airfares Jump 20.5% in Just 15 Months… Aviation Ministry Explains Why Flying Has Become Costlier
The Civil Aviation Ministry says rising fuel prices, foreign exchange fluctuations and higher airline operating costs have pushed domestic ticket prices higher, while the government outlines measures to ease the burden on passengers.
Domestic air travel in India has become noticeably more expensive over the past year. The Ministry of Civil Aviation has informed the Rajya Sabha that average domestic airfares have increased by approximately 20.5% across 72 domestic routes between March 2025 and June 2026.
The data, compiled by the Directorate General of Civil Aviation (DGCA), was shared by <a href=”https://x.com/mohol_murlidhar” target=”_blank”>Murlidhar Mohol</a>, Minister of State for Civil Aviation, in a written reply to a question raised by Member of Parliament <a href=”https://rajyasabha.nic.in/” target=”_blank”>Ranjeet Rajan</a>.
Why Have Airfares Increased?
According to the ministry, airline operating costs have risen significantly over the past 15 months, directly affecting ticket prices.
Explaining the reasons behind the fare hike, Murlidhar Mohol said airline expenses are influenced by several dynamic factors, including:
- Aviation Turbine Fuel (ATF) prices in international markets
- Foreign exchange rate fluctuations
- Aircraft lease rentals
- Excise duties
- Value Added Tax (VAT)
Among these, Aviation Turbine Fuel (ATF) remains the biggest expense for airlines.
Read More- Singapore Airlines Says Air India Transformation Is Finally Showing Results: Fleet, Service and Network Upgrades Gather Pace…
The ministry noted that ATF accounts for nearly 35% to 40% of an airline’s total operating costs, making fuel prices one of the biggest drivers of airfare changes.
Question Raised in Parliament
The information was provided after MP Ranjeet Rajan sought details regarding:
- The rise in domestic airfares since March 2025
- Increased airline operating costs
- The impact of airspace restrictions and flight diversions
- Government measures to reduce ticket prices
- Steps taken to control Aviation Turbine Fuel prices over the last five years
The ministry responded with updated DGCA data covering 72 domestic sectors.
Government’s Measures to Reduce Costs
The Civil Aviation Ministry stated that multiple initiatives are being implemented to make flying more affordable over the long term.
Some of the key measures include:
Protection of Interests in Aircraft Objects Act, 2025
The government believes the legislation will help reduce financing costs for airlines by lowering interest rates and aircraft lease rentals.
Tax Rationalisation
The Centre has also rationalised:
- Central Excise Duty on aviation-related components
- GST on Maintenance, Repair and Overhaul (MRO) services
These measures are aimed at reducing airline maintenance costs.
Request to States on ATF VAT
The ministry has urged various States and Union Territories to lower the Value Added Tax (VAT) imposed on Aviation Turbine Fuel, as state taxes contribute significantly to fuel expenses.
DGCA Monitoring Airfare Transparency
To ensure airlines do not charge fares beyond their declared pricing structure, the DGCA operates a dedicated Tariff Monitoring Unit (TMU).
According to the ministry, the TMU monitors ticket prices on 78 selected domestic routes every month by reviewing fares listed on airline websites.
The objective is to ensure that airlines remain within the fare ranges they have officially declared.
Support During Fuel Price Volatility
The government also highlighted the financial support extended to the aviation sector amid volatile global fuel prices.
According to the ministry, the Centre provided a one-time budgetary support of up to ₹10,000 crore to Oil Marketing Companies (OMCs) to help stabilise ATF prices for scheduled Indian airlines during the fuel price surge triggered by the West Asia crisis.
Additionally, for domestic airline operations:
- ATF price increases were capped at 25% above the 1 March 2026 base price
- The temporary cap remained effective during April and May 2026
The move was intended to cushion airlines from sharp fuel cost spikes and reduce pressure on airfare pricing.
What It Means for Passengers
Although the government has introduced several policy measures to support the aviation industry, passengers continue to feel the impact of rising operational costs through higher ticket prices.
With fuel costs, exchange rates, and leasing expenses remaining volatile, domestic airfares are likely to continue fluctuating based on broader market conditions.
