Centre tells Supreme Court airfare rules are finalised, to be published within two weeks
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.
Published 17 October 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work
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the Lok Sabha on 23 July 2026 that domestic aviation has remained fully deregulated since the Air Corporations Act was repealed in March 1994.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?
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
Show answer
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.
Use this in UPSC Mains: previous-year questions
Recurring theme: Regulating markets after liberalisation: independent regulators and consumer protection
- How to use this
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.
- Airfare PIL argues no authority can review or cap fares or ancillary fees, and seeks an independent regulator.
- Fares are set by airlines under Rule 135; DGCA's Tariff Monitoring Unit only checks 78 routes a month.
- Centre told the court on 16 October 2026 that rules under the Bharatiya Vayuyan Adhiniyam, 2024 are finalised.
Another debate on how India should structure its sector regulators.
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.
- March 1994Air Corporations Act repealed; domestic aviation deregulated
- 11 December 2024Bharatiya Vayuyan Adhiniyam, 2024 gets President's assent
- 1 January 2025New Act comes into force, replacing the Aircraft Act, 1934
- 17 November 2025Supreme Court seeks responses on the airfare PIL
- 16 October 2026Centre says rules are finalised, to be published in two weeks
- 16 November 2026Next hearing; published rules to be placed before the court
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
- 1Independent regulatorA body with power to review airfares and ancillary charges
- 2Fare guidelinesRules to control unpredictable swings in fares and fees
- 3BaggageQuestions the cut in free check-in baggage from 25 kg to 15 kg
- 4TransparencyClear, fair pricing for passengers
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.
Go deeper
Why it matters for UPSC
It brings together GS2 (regulatory bodies, government interventions, judicial role in policy) and GS3 (infrastructure: airports and aviation). It is a ready example for the debate on regulation versus market freedom, and on consumer protection in deregulated sectors.
The core idea
Domestic fares have been deregulated since 1994; airlines price under Rule 135 of the Aircraft Rules and use Dynamic pricing to change fares with demand. A Public interest litigation by S. Laxminarayanan argues that no authority can review or cap fares and ancillary charges. The government's answer is new rules under the Bharatiya Vayuyan Adhiniyam, 2024.
Numbers and dates to remember
- 16 October 2026: Solicitor General Tushar Mehta tells the court the rules are finalised and have administrative approval.
- Bench: Justices Vikram Nath, R. Mahadevan and Aparesh Kumar Singh.
- 16 November 2026: next hearing; published rules to be placed before the court.
- 25 kg to 15 kg: cut in free check-in baggage challenged in the PIL.
- March 1994: Air Corporations Act repealed.
- 78 routes: monitored monthly by DGCA's Tariff Monitoring Unit.
- 1 January 2025: Bharatiya Vayuyan Adhiniyam, 2024 in force.
Where to go next
- Bharatiya Vayuyan Adhiniyam, 2024: the 2024 law that replaced the Aircraft Act, 1934.
- Rule 135 of the Aircraft Rules: how airlines are allowed to set fares.
- Dynamic pricing: why the same seat costs different amounts.
- Public interest litigation: how a citizen's petition reached the Supreme Court.
Go deeper: should the state regulate fares in a deregulated market?
The case for regulation: the petitioner argues that 'opaque, exploitative and algorithm-driven' pricing hurts the poor and last-minute travellers, and that no authority can review or cap fares or ancillary fees. The court earlier called for 'rationalisation' of fares; The Tribune reported a case where one airline charged ₹8,000 and another ₹18,000 for economy on the same route on the same day. Senior Advocate Ravindra Srivastava told the court that the same problems arose ahead of Diwali this year. Air travel is now a necessity for many, especially in emergencies, so the argument is that it needs consumer safeguards like other essential services.
The case for restraint: domestic aviation has been deregulated since 1994, and fares are meant to be set by competition rather than the state. Dynamic pricing lets airlines fill seats and offer cheap fares when demand is low; hard caps could push airlines to cut routes or raise average fares. The existing frame under Rule 135 of the Aircraft Rules already asks for fares based on cost and reasonable profit, and the DGCA can intervene in exceptional situations.
The middle path: rules under the Bharatiya Vayuyan Adhiniyam, 2024 could require disclosure of fare bands, curb sudden surges during emergencies or festivals, and set norms on ancillary charges such as baggage, without fixing every fare. The role of the court is also debated. Through Public interest litigation it has pushed the executive to act, but the design of price regulation is a policy choice best made by a regulator with expertise and accountability, which is why the court has asked to see the published rules rather than write them itself.
Bharatiya Vayuyan Adhiniyam, 2024
The 2024 law that replaced the Aircraft Act, 1934.
In one line: The Bharatiya Vayuyan Adhiniyam, 2024 is the law that replaced the Aircraft Act, 1934 as the base of India's civil aviation regulation.
Passage
Lok Sabha passed the Bill on 9 August 2024 and Rajya Sabha on 5 December 2024. The President gave assent on 11 December 2024, and it came into force on 1 January 2025 as Act No. 16 of 2024.
What it covers
Its eight chapters cover the regulatory powers of the Central government and the DGCA, aircraft registration and airworthiness, licensing of personnel, aerodromes and navigation services, safety and security, offences and penalties, and rule-making powers.
Why it is in the news
The Centre told the Supreme Court on 16 October 2026 that rules on airfare pricing under this Act have been finalised and will be published within two weeks.
Where to go next
Rule 135 of the Aircraft Rules
How airlines are allowed to set fares.
In one line: Rule 135 of the Aircraft Rules, 1937 lets airlines set their own fares, based on cost, service and reasonable profit.
Background
India's domestic aviation has been deregulated since the Air Corporations Act was repealed in March 1994. Airlines are free to set fares, while the government keeps an oversight role and can step in during extraordinary situations.
How oversight works
Under Rule 135, fares must be set with regard to operating costs, service characteristics and reasonable profit. The DGCA's Tariff Monitoring Unit checks fares on 78 selected domestic routes every month by reviewing airline websites, to make sure airlines do not charge outside the fare bands they have declared.
Why it is in the news
The petition before the Supreme Court argues that this frame gives no authority the power to review or cap fares.
Where to go next
Dynamic pricing
Why the same seat costs different amounts.
In one line: Dynamic pricing means the price of the same product changes with demand, time and availability, usually set by software.
How airlines use it
An airline divides seats on a flight into fare bands. Cheaper bands are sold first; as they fill up, or as the date nears and demand rises, software moves the remaining seats into higher bands. Festival weekends, disruptions and late bookings therefore cost more.
The trade-off
Supporters say it fills planes and allows very cheap fares when demand is low. Critics say it lets fares spike when travellers have no choice, such as in emergencies or bad weather, and that the algorithms are opaque to passengers.
Why it is in the news
The PIL before the Supreme Court targets 'algorithm-driven' pricing by private airlines.
Where to go next
Public interest litigation
How a citizen's petition reached the Supreme Court.
In one line: Public interest litigation (PIL) lets a citizen approach the Supreme Court or a High Court on a matter affecting the public, even without personal injury.
How it works
The Supreme Court can be approached under Article 32 for enforcement of fundamental rights, and High Courts under Article 226. From the late 1970s and 1980s the courts relaxed the rule that only an affected person could sue, so that issues affecting large groups could be heard.
Strengths and limits
PIL has pushed governments to act on issues from pollution to prison conditions. Critics warn that courts can be drawn into policy design that is better left to the executive and expert regulators.
Why it is in the news
Activist S. Laxminarayanan's PIL (W.P.(C) No. 1124/2025) on airfares has led the Centre to finalise pricing rules.
Where to go next
Take the 17 October 2026 quiz: 30 Prelims-style questions with answers