Airfares Jump 20.5% Across 72 Domestic Routes: West Asia Conflict, Rising ATF Costs Put Air Travellers Under Pressure

Domestic air travel in India has become noticeably more expensive, and the government has now provided some insight into why passengers are paying more for their tickets.

According to the Ministry of Civil Aviation, the average airfare across 72 domestic sectors increased by 20.5% in June 2026 compared with March 2025. The increase comes as airlines continue to deal with fluctuating operating expenses, particularly the cost of aviation fuel.

The sharp rise has added another layer of pressure for travellers who rely on domestic flights for business, family commitments and holidays.

ATF remains one of the biggest cost pressures for airlines

One of the biggest factors behind airline ticket prices is Aviation Turbine Fuel (ATF). According to the ministry, fuel accounts for approximately 35% to 40% of an airline’s total operating expenses.

That makes changes in fuel prices particularly important for the aviation industry.

The ministry said airline operating costs are dynamic and can be affected by several factors, including international ATF prices, foreign exchange movements, excise duties, Value Added Tax (VAT) and aircraft lease rentals.

The situation became more challenging amid the West Asia conflict, which pushed ATF prices sharply higher. According to the ministry, ATF prices increased by more than 100% during the period of heightened geopolitical tensions.

With fuel representing such a large portion of airline expenditure, higher costs can eventually put pressure on ticket prices.

Airlines also reduced flights amid operational challenges

The rise in fuel costs was accompanied by changes in airline operations. Domestic carriers reduced some flights as part of what the government described as operational rationalisation.

Fewer flights on certain routes can potentially affect the balance between available seats and passenger demand. When capacity is reduced while demand remains strong, fares can come under additional upward pressure.

For passengers, the result is a combination of higher ticket prices and fewer options on some routes.

Why airfare doesn’t depend on fuel prices alone

While ATF is a major factor, the government has pointed out that it is not the only cost affecting airlines.

Foreign exchange rates can influence expenses because airlines often have significant dollar-linked costs. Aircraft leases, maintenance expenses and other international payments can become more expensive when the Indian rupee weakens against the US dollar.

Taxes and duties also play a role.

The ministry highlighted factors such as excise duties and VAT on ATF, as well as aircraft lease rentals, as components that can influence an airline’s overall operating expenses.

This means that even if fuel prices stabilise, airlines can still face pressure from other areas of their cost structure.

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Government says steps are being taken to make flying more affordable

The government has pointed to several measures intended to reduce the financial burden on the aviation sector and, ultimately, help make air travel more affordable.

Among the measures mentioned is the Protection of Interests in Aircraft Objects Act, 2025, which is aimed at supporting the aviation leasing ecosystem and potentially lowering financing-related costs.

The government has also highlighted the rationalisation of Central Excise Duty and GST on Maintenance, Repair and Overhaul (MRO) components and contracts.

Another area of focus is the high VAT charged on ATF in some states and Union Territories. The ministry said it has been requesting states and UTs to consider reducing these taxes.

Such measures are intended to reduce the overall cost burden on airlines, although the impact on passenger fares can depend on several market factors.

DGCA monitoring airfares more closely

With ticket prices becoming a growing concern for passengers, the Directorate General of Civil Aviation (DGCA) has established a Tariff Monitoring Unit (TMU) to keep an eye on airfare trends.

The unit monitors fares on selected domestic routes on a random basis. It checks airline websites each month to ensure that carriers do not charge fares outside the ranges they have declared.

The government said the monitoring mechanism is designed to improve transparency and ensure that passengers are not subjected to arbitrary pricing practices.

However, the system does not necessarily mean that all fares will remain low. Airline ticket prices can still fluctuate depending on demand, booking time, route capacity, fuel prices and other operating conditions.

ATF price increase was capped for April and May

The ministry also noted that ATF prices were capped at a maximum increase of 25% over the March 1, 2026 base price, with the measure taking effect from April 1 for April and May 2026.

The move was intended to provide some stability to airlines during a period of significant cost volatility.

However, the broader combination of fuel prices, geopolitical uncertainty, currency movements and operational changes continues to influence the cost of flying.

What this means for passengers

For travellers, the 20.5% increase in average airfare across the 72 monitored domestic sectors is a reminder that flight prices can be influenced by factors far beyond the simple demand for a particular ticket.

Fuel remains at the heart of the issue, but the aviation industry’s cost structure is complex. From aircraft leasing and maintenance to taxation and foreign exchange rates, several moving parts ultimately influence what passengers pay.

As India continues to see strong demand for domestic air travel, the challenge for airlines and policymakers will be to balance affordability with the financial realities of operating an airline.

For now, passengers may need to plan further ahead, compare fares carefully and remain flexible with travel dates where possible. The government, meanwhile, will be under pressure to ensure that rising operating costs do not make air travel increasingly inaccessible to the average Indian traveller.