Air India Caps Economy Fares on All Non-Stop Domestic Flights From December 4

Air India is capping economy class fares on all non-stop domestic flights from 4 December, while IndiGo faces wide disruption and cancellations. The moves highlight pressure on airlines, as authorities demand passenger protection after steep last-minute prices and large-scale schedule problems across several Indian airports.

IndiGo’s network across India remains under strain, with more than 100 flights cancelled on Saturday. Thousands of passengers were left waiting at airports in Mumbai, Hyderabad, Guwahati and other cities. The Ministry of Civil Aviation ordered IndiGo to finish all pending refunds by Sunday evening and barred airlines from charging rescheduling fees.

Air India economy class airfares cap on non-stop domestic routes

Air India said the new limits on economy class prices apply only to non-stop domestic routes. The airline stated that automated revenue management tools often push fares higher near departure. The cap is meant to shield passengers from those sharp increases on direct flights within India.

In a statement posted on X, the Air India spokesperson said, "Air India & Air India Express clarify that, since 4 December, economy class airfares on non-stop domestic flights have been proactively capped to prevent the usual demand-and-supply mechanism being applied by revenue management systems. We are aware of screenshots of last-minute itineraries with one-stop or two-stop flights or a combination of economy and premium economy or business cabins taken from third-party platforms. It is not technically possible to cap all such permutations, but we are engaging such platforms to exercise oversight."

Impact of economy class airfares cap on platforms and capacity

The airline underlined that prices for complex trips, like multi-stop routes or mixed cabins, often appear on third-party booking sites and remain harder to control. Air India said such combinations cannot be fully capped under current systems, but teams are working with these platforms to tighten monitoring and reduce extreme fares.

The spokesperson further added that both Air India and Air India Express are working to increase capacity so that travellers and their baggage can reach their destinations at the earliest. This effort comes as overall demand stays high and other carriers, including IndiGo, struggle with delays, cancellations and passenger backlogs at busy hubs.

Together, Air India’s fare cap and IndiGo’s disruption show contrasting responses to pressure in the domestic market. Regulators are focusing on both pricing and basic service delivery, while airlines try to balance revenue systems, capacity limits and the need to keep passengers moving without sudden cost shocks.