# Centre tells Supreme Court airfare rules are finalised, to be published within two weeks

URL: https://upsc.help/current-affairs/2026-10-17/airfare-rules-sc-two-weeks/
Date: 17 October 2026 (2026-10-17)
Source: The Hindu, News
UPSC papers: GS2, GS3
Publisher: upsc.help (Pratidin), free and open-source UPSC Civil Services current affairs. Not affiliated with UPSC. Every fact was checked against the source reports by a separate review before publishing.

**In one line:** After a public interest petition against 'algorithm-driven' airfare spikes, the Centre has told the Supreme Court that rules on airfare pricing under the Bharatiya Vayuyan Adhiniyam, 2024 are finalised and will be published within two weeks.

On 16 October 2026 Solicitor General Tushar Mehta told the Supreme Court that rules to regulate airfare pricing have been finalised. 'The rules have been finalised and the administrative approval to the rules has been granted,' he said, adding that they would be published within two weeks. A Bench of Justices Vikram Nath, R. Mahadevan and Aparesh Kumar Singh asked him to place the published rules, framed under the Bharatiya Vayuyan Adhiniyam, 2024, before the court. The matter will be heard next on 16 November 2026. The content of the rules has not been made public.

The case is a public interest litigation (W.P.(C) No. 1124/2025) by activist S. Laxminarayanan against what he calls 'opaque, exploitative and algorithm-driven' pricing by private airlines. He points to sudden fare hikes during emergencies, festivals and peak periods, and to the cut in free check-in baggage from 25 kg to 15 kg. He says no authority currently has the power to review or cap airfares or ancillary fees, and seeks an independent regulator and guidelines to control unpredictable swings in fares and charges. The court sought responses on 17 November 2025 and earlier called for 'rationalisation' of fares. In August 2026 the Centre told the court it had fast-tracked the rules and would finalise them in three weeks. Senior Advocate Ravindra Srivastava, for the petitioner, questioned the delay, saying the same problems had arisen ahead of Diwali this year.

The background is three decades of deregulation. The government told the Lok Sabha on 23 July 2026 that domestic aviation has remained fully deregulated since the Air Corporations Act was repealed in March 1994. Airlines set fares under Rule 135 of the Aircraft Rules, 1937, on the basis of operating cost, service and reasonable profit. The DGCA's Tariff Monitoring Unit checks fares on 78 domestic routes every month to see that airlines stay within their declared fare bands, and the government intervenes only in exceptional circumstances. The Bharatiya Vayuyan Adhiniyam, 2024, which came into force on 1 January 2025, replaced the Aircraft Act, 1934.

## Prelims facts

- On 16 October 2026 the Centre told the Supreme Court that airfare pricing rules under the Bharatiya Vayuyan Adhiniyam, 2024 are finalised and will be published within two weeks.
- The PIL by S. Laxminarayanan seeks an independent regulator and guidelines on fares and ancillary charges, and challenges the cut in free check-in baggage from 25 kg to 15 kg.
- Domestic aviation has been deregulated since the Air Corporations Act was repealed in March 1994; airlines set fares under Rule 135 of the Aircraft Rules, 1937.
- DGCA's Tariff Monitoring Unit checks fares on 78 domestic routes every month.
- The Bharatiya Vayuyan Adhiniyam, 2024 replaced the Aircraft Act, 1934 and came into force on 1 January 2025.

## Quick recall

- **Under which law will the new airfare pricing rules be framed?** The Bharatiya Vayuyan Adhiniyam, 2024.
- **When did the Bharatiya Vayuyan Adhiniyam, 2024 come into force, and what did it replace?** 1 January 2025; it replaced the Aircraft Act, 1934.
- **When were domestic airfares in India deregulated?** With the repeal of the Air Corporations Act in March 1994.
- **Which rule lets airlines set their own fares?** Rule 135 of the Aircraft Rules, 1937 (fares based on operating cost, service and reasonable profit).
- **How many domestic routes does DGCA's Tariff Monitoring Unit check each month?** 78.
- **What baggage change does the airfare PIL challenge?** The cut in free check-in baggage from 25 kg to 15 kg.
- **Who filed the airfare PIL in the Supreme Court?** Activist S. Laxminarayanan (W.P.(C) No. 1124/2025).
- **Next hearing date in the airfare case?** 16 November 2026, when the published rules are to be placed before the court.

## Prelims practice question

With reference to the regulation of domestic airfares in India, consider the following statements:
1. Domestic airfares have been deregulated since the repeal of the Air Corporations Act in 1994.
2. The DGCA fixes the maximum fare on every domestic route.
3. The Bharatiya Vayuyan Adhiniyam, 2024 replaced the Aircraft Act, 1934.
Which of the statements given above are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer: (c) 1 and 3 only. Statement 1 is correct: the Air Corporations Act was repealed in March 1994. Statement 2 is incorrect: airlines set fares under Rule 135; the DGCA's Tariff Monitoring Unit only monitors 78 routes to check that fares stay within declared bands. Statement 3 is correct: the 2024 Act came into force on 1 January 2025.

## UPSC previous-year questions this connects to

- UPSC Mains 2015, GS2: To achieve the desired objectives, it is necessary to ensure that the regulatory institutions remain independent and autonomous. Discuss in the light of experiences in the recent past. (https://upsc.help/pyq/q304-achieve-desired-objectives-necessary-ensure-regulatory-institutions/)
  How to use this story in the answer: Use civil aviation as an example where the absence of a fare regulator pushed the issue to the Supreme Court, strengthening the case for independent, expert regulators.
- UPSC Mains 2013, GS2: The product diversification of financial institutions and insurance companies, resulting in overlapping of products and services strengthens the case for the merger of the two regulatory agencies, namely SEBI and IRDA. Justify. (https://upsc.help/pyq/q305-product-diversification-financial-institutions-insurance-companies-resulting/)

## Mains practice question

Deregulation of domestic airfares has expanded air travel but also produced sharp fare spikes. Discuss the case for and against regulating airfares in India. (150 words)

### Model answer

On 16 October 2026 the Centre told the Supreme Court that airfare pricing rules under the Bharatiya Vayuyan Adhiniyam, 2024 are finalised, in response to a PIL against 'algorithm-driven' fare spikes.

## Case for regulation
- Fares surge in festivals and emergencies, hurting the poor and last-minute travellers.
- The petitioner argues no authority can review or cap fares or ancillary fees.
- Ancillary charges have grown; free check-in baggage was cut from 25 kg to 15 kg.
- Oversight is thin: DGCA's Tariff Monitoring Unit checks only 78 routes a month.

## Case against hard caps
- Deregulation since 1994 lets airlines compete on price.
- Dynamic pricing fills seats and allows cheap fares when demand is low.
- Rule 135 already asks for fares based on cost and reasonable profit.

## Way forward
- Transparent fare bands and surge limits during emergencies.
- Clear norms on ancillary charges.
- An expert regulator, not courts, to design price rules.

The aim should be fair pricing with competition intact.

## The basics

## Why this matters

Anyone who has tried to book a flight before Diwali knows the problem: fares can jump sharply from one day to the next. On 16 October 2026 the Centre told the Supreme Court that rules to regulate airfare pricing have been finalised and will be published within two weeks. The case raises a classic governance question: how far should the state regulate prices in a market it deliberately freed?

## How India's airfares came to be free

The government says India's domestic aviation sector has remained fully deregulated since the Air Corporations Act was repealed in March 1994. Airlines set their own fares under Rule 135 of the Aircraft Rules, which asks them to price on operating cost, service and reasonable profit. The DGCA (Directorate General of Civil Aviation) watches, but does not fix, fares.

## Why fares jump

Airlines use Dynamic pricing: software raises or lowers the price of each seat as demand changes. Fares are sold in price bands, and as cheaper bands sell out, the next seat costs more. This fills planes and lets airlines earn more when demand peaks, but it can leave late or emergency travellers paying several times the usual fare.

## What the petition wants

## The legal route

The petitioner came to the Supreme Court under its writ jurisdiction (see Public interest litigation). The new rules will be framed under the Bharatiya Vayuyan Adhiniyam, 2024, the law that replaced the 90-year-old Aircraft Act. Their content is not yet public, so whether they cap fares, set bands or only demand disclosure is still unknown.

## Sources

- https://www.livelaw.in/top-stories/rules-on-airfare-pricing-finalised-to-be-published-within-two-weeks-centre-tells-supreme-court-555047
- https://www.tribuneindia.com/news/india/rules-on-airfare-pricing-finalised-will-be-published-in-two-weeks-centre-tells-sc
- https://www.business-standard.com/industry/aviation/plea-on-air-fare-spikes-centre-informs-supreme-court-new-rules-approved-126101600767_1.html
- https://kashmirlife.net/centre-says-airfares-remain-deregulated-monitors-fares-on-78-domestic-routes-444533/
- https://en.wikipedia.org/wiki/Bharatiya_Vayuyan_Adhiniyam,_2024