India’s Airfares Are No Longer Rising Or Falling — They’re Splitting
Airfare pricing in India is increasingly split between deep off-peak discounts and sharp peak-season spikes, driven by capacity, competition and disruptions.
The Gist
Air India Express launches a PayDay Sale amidst uneven pricing in India's aviation market.
- Domestic fares start at Rs 1,950 and international tickets from Rs 5,590.
- Bookings are open until January 1, 2026, for travel between January and October 2026.
- Industry experts highlight the need for more competition to stabilise pricing across airlines.
Air India Express’s latest PayDay Sale comes at a time when pricing across India’s aviation market has become increasingly uneven, with deep discounts during lean periods alongside sharp fare spikes during peak demand.
Announced earlier this week, the Tata Group-owned airline is offering domestic fares starting at Rs 1,950 and international tickets from Rs 5,590, with lite fares — excluding check-in baggage — priced even lower. Bookings remain open until January 1, 2026. The special fares are valid for domestic travel from January 12th to October 10th, 2026, and for international travel from January 12th to October 31st, 2026.
“That’s a welcome move,” said Vandana Singh, chairperson of the Federation of Aviation Industry in India (FAII). “It sets a trend where Air India Express is not only promoting itself but also showing a sense of civic responsibility toward passengers.”
At a time when no other major Indian carrier is running a comparable sale, the promotion underscores how fragmented pricing has become across the sector.
Deep Discounts And Sharp Spikes
Airlines across India are increasingly relying on such sales to fill seats months in advance. For carriers, early bookings lock in cash flows and help manage inventory in a market where capacity has expanded rapidly. For travellers, they create the impression that fares are stabilising or even falling — but only during quieter travel windows.
Airlines have repeatedly leaned on fare promotions this year to stimulate demand and secure advance bookings. Air India Express ran multiple sales, including a 'Freedom Sale' in August 2025, offering millions of discounted seats with domestic fares starting around Rs 1,279 and international tickets from about Rs 4,279. This was followed by another PayDay Sale in September, with domestic fares starting near Rs 1,200 and international deals.
IndiGo also had a sale on its 19th anniversary in August, advertising all-inclusive domestic fares from roughly Rs 1,219 and discounted international tickets valid for travel through March 2026. Akasa Air, too, held a Pay Day Sale in late August, offering domestic fares from about Rs 1,399 along with international discounts.
The broader picture, however, is more complex. Prices are no longer best described as rising or falling steadily. Instead, there is either aggressive discounting during surplus periods and sharp spikes when the system comes under stress.
“Because of the IndiGo fiasco, passengers have become far more cautious,” said CK Govil, former president of the Air Cargo Agents Association of India. “People don’t want to risk spoiling their holidays, and that caution is reflected in booking behaviour. This is one reason airlines are offering discounts.”
Monopoly Concerns
Not everyone agrees that fares are merely splitting. Singh argues that the dominant trend remains upward, particularly in a market shaped by concentration.
“Domestic fares have risen by about 40%, while international fares are up roughly 15%, based on what I’ve seen. In a largely monopolistic situation, with IndiGo holding around 67% market share, prices have gone through the roof, and Air India hasn’t pushed back,” Singh said.
IndiGo, which controls more than 60% of India’s domestic market, has run frequent sales during lean periods, while Akasa Air has leaned into targeted promotions on routes where capacity additions have outpaced demand.
These are no longer occasional marketing exercises but part of a broader shift in pricing strategy as airlines compete aggressively for load factors.
Some industry executives see potential relief from new entrants. Singh pointed to three new airlines that have received no-objection certificates, including Shankh Air, which plans to operate 30 aircraft by 2027, starting with 15 next year.
“Only with more competition will pricing become reasonable. When passengers start choosing one airline over another, carriers respond with sharper campaigns and more aggressive marketing,” Singh said.
Do Cheap Tickets Exist?
During off-peak periods, average headline fares on several routes have softened. Sale windows have pushed one-way fares on routes such as Delhi–Mumbai, Bengaluru–Kolkata and Chennai–Kolkata into the Rs 1,200–Rs 2,000 range, with some tickets dipping lower.
We have analysed the current airfare trends for the first week of January 2026. The data below represents the average one-way, economy-class rates for several major domestic routes.
The market is clearly splitting, as rates for the same routes are no longer in the same ballpark and there are gaps. For example, on the Delhi → Kolkata route, Air India Express (Rs 3,994) is nearly half the price of Akasa Air (Rs 8,684).
At the same time, the effective cost of travel increasingly depends on add-ons such as baggage, seat selection, meals and flexibility — costs that can significantly inflate the final ticket price and narrow the gap between discounted and peak fares.
International routes show a similar pattern. Capacity additions to the Middle East and Southeast Asia have eased fares from last year’s highs, with sale-period tickets dipping below Rs 6,000 on some short-haul sectors.
“Travellers have become more discerning about whether they can trust Indian airlines. At the same time, international destinations are offering better prices and more certainty, including cheaper hotels, compared with Indian hotels and carriers seen as less reliable,” Govil said.
Festive Seasons Expose the Other Extreme
The contrast is most visible during peak travel periods. Just weeks before the Air India Express sale, travellers on short domestic routes encountered fares approaching Rs 20,000.
During Diwali and the year-end holidays, advance airfares across major cities rose by as much as 52% compared with last year’s festive window.
Data reported by The New Indian Express showed the steepest increase on the Mumbai–Patna route, where average one-way non-stop fares climbed to Rs 14,540. Fares on Bengaluru–Lucknow and Mumbai–Kolkata rose 47% each, nearing Rs 10,000.
“Airfares during Diwali and to Prayagraj during the Kumbh Mela were unusually high. The Prime Minister’s vision of enabling every Indian to fly remains aspirational, but private airlines have not supported that objective,” Govil said.
Disruptions and Regulation Add to Volatility
These fare spikes were exacerbated by short-term supply disruptions — aircraft groundings linked to engine issues, weather-related delays and persistent congestion at major airports.
The situation escalated in early December when an operational crisis at IndiGo led to thousands of flight cancellations nationwide. With a large share of domestic capacity suddenly unavailable, last-minute fares on rival airlines surged, in some cases reaching high five-figure levels.
The spike triggered swift government intervention. On December 5, the Ministry of Civil Aviation imposed temporary caps on domestic airfares, setting maximum economy-class limits ranging from Rs 7,500 for routes under 500 km to Rs 18,000 for sectors above 1,500 km, excluding taxes.
The caps were lifted after a week, with the government stressing that continuous fare regulation was not feasible in a deregulated market.
