Picture this. You find a flight. It costs about 6K.

Then two weeks later, it costs 18,000.

Then a week later, it's down to 12K.

What happened?

Airlines practice something called dynamic pricing, which means that fares can change depending on demand and the number of available seats.

But from the passenger's perspective, when the same seat costs over three times in just a couple weeks, something is off.

And now, there's a PIL before the Supreme Court arguing that airfares in India have become too high and too unpredictable. It asks for more government oversight.

So what's going on? Why are flight prices so high?

And what, if anything, can the government do about it?

Tune in to the latest episode of The Signal Brief to learn more.

The Core produces The Signal Brief. Follow us wherever you get your favourite podcasts.

NOTE: A machine transcribed this episode. A human has looked at this text but there might still be errors. Please refer to the audio above, if you need to clarify something. If you want to give us feedback, please write to us at feedback@thecore.in.

TRANSCRIPT:

Kudrat (Host): Picture this.

You have a wedding to attend, say, in Jodhpur. It’s two months away. You look up flights from Delhi and the ticket is Rs 6,200. Manageable, if you book it now.

But, you’re still trying to figure out the dates that will work with your office. Maybe you fly out on Friday. Maybe Saturday is better. You decide to wait a little longer before you commit.

A week passes. Then another. And another.

The wedding is now just a month away, so you check the same flights again.

The price has shot up, from Rs 6,200 to Rs 18,400. Tripled.

You book the ticket anyway. Your budget is tight, but you do not want to miss the wedding.

A week later, you check again, out of curiosity.

The same flight has now fallen to Rs 12,500.

Still double the original price, but significantly cheaper than what you paid.

Kudrat (Host): S. Laxminarayanan lived through a version of that experience.

He decided to file a public interest petition in the Supreme Court.

The PIL argues that air travel is an essential service, and that India needs rules–fare caps, as well as limits on how airlines decide things like extra baggage costs.

At first glance, that sounds like a solid solution.

But, critics say such caps go against how a free market should work, that prices should rise when demand rises.

So why are airfares fluctuating this much? And can caps be the solution?

Kudrat (Host): My name is Kudrat Wadhwa and you’re listening to The Signal Brief.

You’re listening to our Friday episode, where we tell stories about how Indians live, work and spend.

In today's episode: Why are Indian airfares so unpredictable, and what will it take to make flying more affordable?

Kudrat (Host): The reason your ticket price keeps changing is because airlines practice something called ‘dynamic pricing.’

As demand changes, the price changes too.

If more people want the remaining seats, those seats become more expensive.

Here’s economist Prerna Rakheja talking about this.

Prerna: Dynamic pricing is there in a lot of industries.

You know, Amazon uses it, Uber, Ola, all these companies have sort of, kind of started running with it.

But the airline industry was some of the sort of premier examples of industries that adopted it, primarily with deregulation.

And there are pros and cons. It encourages competition. It encourages more players to come in. It offers sort of, the, the free market forces to play in.

But it runs into this issue that what if demand is not meeting supply? What if demand is greater than supply? Then we'd run into some of these issues where prices are really high, and the average Indian population cannot really afford it.

Kudrat (Host): This wasn't always how Indian aviation worked.

For decades, the government tightly regulated the industry, while state-owned ‘Indian Airlines’ dominated domestic flying.

That began to change in the 1980s and accelerated in the 1990s, as private airlines were allowed to enter.

More competition brought in more airlines, more flights and, eventually, more people flying.

But it also changed the way airlines priced tickets.

Instead of every seat costing roughly the same, airlines could divide seats into different fare categories and adjust prices as demand changed.

Prerna: I would say prices technically may have decreased for a period of time because there was so much entry, but now we're in that phase where, again, the demand by the high income is enough to meet the supply, so we are running into this high, you know, large population problem essentially.

Mark: Today, unfortunately,, we're boiled down to two large airlines and a couple of airlines that really don't have much credibility or a reasonably strong network, by themselves.

Kudrat (Host): That was aviation expert Mark Martin, who advises stakeholders in the aviation industry.

And the numbers back up his broader point about concentration. In August, IndiGo carried 65% of all domestic passengers in India. The Air India Group carried another 26.7%.

Put together, that’s more than nine out of every ten domestic passengers flying with just two airline groups.

And when fewer airlines control more of the market, they also have more room to influence what passengers pay.

Mark: My personal view of where this originates from is airlines in India are not, you know, they're pretty much turning into a loose cannon, a sort of an entity. It's more of, you know, instead of an airline being mature, being understanding, being, being consumer and traveler and market-oriented, being supportive, airlines in India today are being, you know, more...

They seem to demonstrate an attitude of being a territorial gang, you know, about market dominance, about, for want of a better word, more like territorial street gang gundas. And this is something which is very unbecoming of our aviation sector.

Kudrat (Host): Concentration isn't the whole story, though.

Airlines say that prices are high because they have a long list of costs to cover, and getting a flight into the air is expensive.

I spoke to a former DGCA official, who broke down what an airline needs to operate: aircraft, pilots and crew, airport slots, a lot of capital.

And right now, geopolitics is making things even harder.

The ongoing US-Israel war on Iran has raised costs across the board.

Jet fuel is one of the biggest pieces of that bill. Indian airlines also have significant other dollar-linked costs. When the rupee weakens, as it has due to this war, everything gets more expensive.

You can see these rising costs in IndiGo’s numbers.

In the quarter that ended in June 2026, the airline’s fuel spend nearly doubled, to about Rs 10,800 crore.

Its yield, or revenue per passenger kilometre, also went up by about 21%. That still was not enough. IndiGo posted a loss.

Air India also introduced a fuel surcharge on domestic tickets in March. From April, it shifted to a distance-based surcharge, ranging from Rs 299 for flights up to 500 km to Rs 899 for flights over 2,000 km.

Mark agreed that fuel is expensive. But he argued that rising fuel costs alone do not justify the surcharges airlines are passing on to passengers.

Mark: My bigger question and my bigger point here is those fuel surcharges that the airlines charge a traveler. The cost of jet fuel has come down because you know why? The government of India has done everything in its capacity and power to soften the blow on the cost of jet fuel. The government has absorbed quite a bit of that loss, has not let the fluctuation hit aggressively.

In Europe, the cost of jet fuel has gone up three times. In India, just, it's just gone up by maybe about, you know, maybe about 0.25 or 0.3 from the current rates. So, when the government is doing so much, I see no reason why on earth does an airline have to increase its fuel surcharge. That's also very unreasonable.

Kudrat (Host): Here’s the thing. From a consumer’s point of view, the reason for the high price, whether legitimate or not, doesn't change the immediate problem.

The ticket is expensive.

And if you need to travel a longer distance for a wedding, for a family emergency or for work, flying isn't exactly optional.

That's the argument at the heart of the petition currently before the Supreme Court.

Charu: I'm Charu Mathur. I am an advocate on record practicing before the Supreme Court, and I undertake lots of matters which touch the ordinary lives of ordinary citizens like us.

Kudrat (Host): Charu is one of the lawyers behind the PIL which seeks limits on airfares and challenges additional charges such as baggage fees.

Charu: During the Kumbh or even any other religious factor, festival or during the weekends, right? You will see that flight prices, they rise exorbitantly. So we are saying that it is an essential service covered under the Essential Services Act, and so they should be regulated, right?

Kudrat (Host): But if airlines are already operating in a difficult environment, the industry argues that putting a cap or ceiling on fares could make things worse.

Here’s MR Sivaraman, who previously worked at DGCA, speaking to NDTV Profit about this.

CLIP: Will Your Airplane Tickets Have A Price Cap? Supreme Court Vs Soaring Airfares by NDTV Profit

Kudrat (Host): But Charu sees a different problem.

Charu: Even if there is a free market economy, there has to be some site of oversight, right? So even if, in this case, if you see there is a Director General of Civil Aviation, DGCA, which is there. But effectively, it is a toothless tiger, right? You are effectively having only two airlines which are running today.

You have got Air India, and then you have got Indigos. So with this, there is effectively no choice to the consumer, and in many sectors. There are so many, so less airlines that, consumer is left to no choice. Further, if you see that government has invested huge amount of money in the development of airports. So huge airports have come out. Almost 80 new airports have come out in the last few years.

But if you see that most of them are becoming ghost airports because you don't have flights or the flights are unaffordable, so it is actually a dent on our economy also. So, to say that the market should discover its own price, that is taking it too far. Why?

Because there has to be some mechanism. There has to be some transparent mechanism. They cannot just jack up the price for, for any reason.

Kudrat (Host): So where does that leave the government?

The Centre has been working on new aviation rules covering issues including airfares, surge pricing and excess baggage charges.

In August, the government told the Supreme Court it had fast-tracked the rules and was close to finalising them.

That does not automatically mean a fare cap, though.

In fact, this month, the government ruled out a general cap on airfares for the festive season.

Instead, it said it would engage with airlines and ask them to keep fares reasonable.

So for now, the government is stopping short of a blanket cap.

But what would happen if it did impose one?

Here’s economist Prerna again.

Prerna: So one benefit of that is that it offers certainty in, somewhat certainty in pricing when buying tickets. But the con of that is that it may exhaust the entire supply early on, and so we may run into this issue that if you wanna buy a last-minute ticket, even if you're willing to pay whatever price there may be, you are unable to find that option.

So you don't have the option to kind of buy a last-minute ticket and make that trip, which is something that exists with dynamic pricing. Because even at the tail end of that demand, if you are in that, you know, window where there's two seats left, but you're willing to pay the price, you can get a ticket.

And so I guess to your question about, like, what are the options? So obviously one way to go is that, you can have caps and you can have the tatkal kind of ticket option that maybe we still create an option for the people who wanna buy last minute, like in railways that they were able to. But there is sort of red tape-ism in that. Can you really get the ticket? Can you only get the ticket if you have a connection?

Kudrat (Host): So if a blanket fare cap comes with its own trade-offs, what else could make flying more predictable?

Prerna: Which is missing in India, but very doable, and something that exists in more mature aviation markets, is greater transparency. So the issue right now is that the DGCA only publishes, you know, number of passengers who are flying. They are not publishing data on actual prices paid for tickets sold. This is something that is published by the Bureau of Transportation Statistics in the US for a 10% random sample.

And what that allows to do is, really what we care about is if the price is truly high because demand is high, it's okay.

That's just free market. But if the price is high because some of these airlines are exercising their market power, that is something we need to sort of control. And publishing sort of a similar 10% random sample that is out in the public to study by researchers, academics, people in the government, regulatory bodies, to ensure that there is no crossover in this demand-driven spike versus, you know, predatory pricing by carriers, I think that is something that could be potentially helpful.

Kudrat (Host): Mark arrives at a similar conclusion, although from a different direction.

Mark: That the Ministry of Civil Aviation needs to also set up a strong economic watchdog, a watchdog, group within the ministry to keep a track of this. You know, we have it in the stock market. We have... SEBI has, a watchdog which keeps a track on, on, on, insider trading, on the price of stock going up aggressively, of people manipulating the price of stock.

Why can't we have the same logic and the same system in, for civil aviation and airline tickets? Why don't we have it? We should.

We are the largest aviation market. We're the fastest-growing and the, one of the largest aviation markets in the world. And, and the government should not be told to do this.

You don't need someone like me or you to discuss this and, you know, the government should be responsible enough to set, set this practice by, in place by itself, by themselves.

Kudrat (Host): The next phase of India's aviation story may not be about stopping airlines from charging more.

Rather, it may be about making sure we can understand why they're charging more.

Is it because thousands of people are trying to book the same flight?

Is it because there aren't enough seats?

Is it because operating that flight has become more expensive?

Or is an airline using its position in a concentrated market to charge more?

Right now, we just don't have enough public data to clearly tell the difference.

But as more and more Indians start flying, that transparency may not remain negotiable anymore.

Outro: That's all for today. You just heard The Signal Brief, your weekly look at the stories shaping how Indians live, work and spend.

The Core produces The Signal Brief. Follow us wherever you get your favourite podcasts.

To check out the rest of our work, go to www.thecore.in.

If you have feedback, we'd love to hear from you. Write to us at feedback@thecore.in or you can write to me personally at kudrat@thecore.in.

Thank you for listening!