India’s civil aviation ministry is playing see-saw with low-cost carriers. And their customers.

In the span of a week, it went from telling airlines they couldn’t charge customers whatever they liked for the majority of seats to scrapping all caps on airfares. A pair of seemingly contradictory directives that may imminently reshape the country’s aviation landscape.

On 18 March, the ministry directed that at least 60% of the seats on every flight must be free to book. This was in line with a 24 February order from the Director General of Civil Aviation, the aviation regulator, requiring airlines to refund flyers in full if they cancelled a booking within 48 hours. From 26 March, it said, airlines must return the full fare, including any additional fees or charges, if the domestic flight was scheduled seven days later and the international flight 14 days later.

The regulator was responding to growing flyer discontent. ComplaintsMoneycontrolAir passenger complaints spike 57% in FY25; SpiceJet, Air India lead the pack by airline customers had risen by 57% in FY25 to more than 9,700 and delays in refunding unused tickets and deductions to refunds, it noted,  were among the top grievances.

If the intention was to give flyers a better deal, the ministry’s next directive, issued just three days later, clouded the skies. 

It removed the caps on fares imposed just three months earlier. The decision was informed by the US-Israeli war against Iran which had already spiked jet fuel prices abroad—around 60% in the US—and was expected to hit the Indian market in earnest. As the crisis deepens, the fuel bill is expected to amount up to 80%CNBC TV-18Rising crude prices could push jet fuel to 80% of airline costs of the operational cost, likely prompting upward fare revisions. Air India and its low-cost carrier, Air India Express, have already announced fuel surchargesAir IndiaPhased Implementation Of Fuel Surcharge on fares. 

The refund order could further inflate ticket prices. The Federation of Indian Airlines warnedThe HinduAir India, IndiGo, SpiceJet oppose government’s 60% free seat selection decision as much, saying in a letter to the government that the “financial impact” of the 18 March order would compel carriers to “recover the lost revenues through increases in fares”.

© The Ken