Why in news?
New rules under the Bharatiya Vayuyan Adhiniyam, 2024 allow the Centre to direct airlines on fares during extraordinary situations. The move follows a PIL by social activist S. Laxminarayan seeking binding norms against arbitrary pricing and ancillary charges during festivals, holidays and emergencies.
UPSC Relevance
Prelims: Bharatiya Vayuyan Adhiniyam 2024, aviation regulators (DGCA, BCAS, AAIB, AAI, AERA), UDAN, ICAO and international aviation conventions, freedoms of the air.
Mains GS2: Statutory and regulatory bodies; government policies and interventions; consumer protection.
New Rules, Bharatiya Vayuyan Adhiniyam 2024
- Written directions: The Union government can issue written directions to airlines on airfares in the public interest during “extraordinary situations”. The term is not defined in the rules.
- Tariff filing: Airlines must submit their tariffs to the DGCA in the form, manner and at intervals specified.
- Tariff display: Fares must be published on airline websites or other DGCA-specified digital platforms.
- Fare breakup: Booking sites and tickets must show the total amount payable with base fare, taxes, fees, cancellation charges and refund conditions.
- No fare caps: The government continues to treat airfares as market-driven. Earlier requirements under Air Transport Circular 2 of 2010 have now been built into the rules.
Past government interventions in airfares
| Occasion | Nature of intervention |
|---|---|
| COVID-19 pandemic (2020) | Lower and upper fare bands fixed by duration of flight; removed in August 2022 |
| IndiGo operational crisis (December 2025) | Fare bands imposed after nearly 5,000 flights were cancelled |
| Kumbh Mela, Pahalgam attack, Kerala floods | Informal advisories asking airlines to show restraint |
Bharatiya Vayuyan Adhiniyam, 2024
- Replaced: The Aircraft Act, 1934, which had been amended 21 times.
- Scope: Regulates design, manufacture, maintenance, possession, use, operation, sale, export and import of aircraft.
- Three statutory authorities under the Ministry of Civil Aviation:
- DGCA – safety oversight and regulation.
- BCAS (Bureau of Civil Aviation Security) – aviation security.
- AAIB (Aircraft Accidents Investigation Bureau) – investigation of accidents and serious incidents.
- Centre’s powers: Can issue directions to these bodies, make rules on licensing, aerodromes and safety, and issue emergency orders in the interest of public safety.
- Radio telephone operator certificate: Its issue has been shifted from the Department of Telecommunications to the DGCA.
- Appeals: Against penalties, first appeal lies to an officer senior to the adjudicating officer; second appeal to the Central government.
- Penalties: Imprisonment up to 2 years and/or fine up to ₹1 crore for offences like carrying prohibited goods or building structures that endanger flights near aerodromes.
- Criticism: It retains most features of the 1934 Act; regulators remain under government control and lack functional autonomy, unlike ICAO’s suggestion of independent oversight.
Who Regulates What in Indian Civil Aviation
| Body | Legal basis | Role |
|---|---|---|
| Ministry of Civil Aviation | Executive | Policy for the sector; Entry 29 of the Union List covers airways, aircraft, air navigation and aerodromes |
| DGCA | Bharatiya Vayuyan Adhiniyam, 2024 (earlier attached office) | Safety regulation, licensing of pilots and aircraft, airworthiness, monitoring of tariffs |
| BCAS | Set up in 1987 after the Kanishka bombing (1985); made statutory in 2020 | Security standards at airports and for airlines |
| AAIB | Set up in 2012; statutory status in 2020 | Independent investigation of aircraft accidents |
| Airports Authority of India (AAI) | AAI Act, 1994 | Builds and manages airports; provides air navigation services |
| AERA | AERA Act, 2008 | Fixes tariffs for aeronautical services (landing, parking, user fees) at major airports; does NOT fix airline fares |
| Competition Commission of India | Competition Act, 2002 | Acts against cartelisation and abuse of dominance, including by airlines |
Airfares: Regulation vs Market
- Deregulation: The Air Corporations Act, 1953 had nationalised air transport (Indian Airlines and Air India). Its repeal in 1994 ended the state monopoly and opened the sector to private airlines. Since then fares are market-determined.
- Dynamic pricing: Airlines use ‘fare buckets’; prices rise as seats fill up. Fares change with demand, seat occupancy, fuel (ATF) cost, aircraft capacity and season.
- Arguments for no caps: Caps reduce competition, hurt airline finances and may cut services on low-demand routes. India’s airlines operate on thin margins and several have failed (Kingfisher, Jet Airways, Go First).
- Arguments for intervention: Market concentration (IndiGo holds over 60% of the domestic market), price gouging during emergencies, hidden ancillary charges, and limited options on some routes.
- Middle path: Transparency, monitoring, emergency powers and competition law, rather than permanent price control. The new rules follow this approach.
Practice MCQ
Q1. With reference to the Bharatiya Vayuyan Adhiniyam, 2024, consider the following statements:
1. It replaced the Aircraft Act, 1934.
2. It provides for the DGCA, BCAS and AAIB as authorities under the Central government.
3. It empowers the Airports Economic Regulatory Authority to fix maximum airfares on all domestic routes.
How many of the above statements are correct?
(a) Only one (b) Only two (c) All three (d) None
Answer: (b)
Explanation: Statement 3 is incorrect. AERA, set up under the AERA Act, 2008, fixes charges for aeronautical services at major airports, not airline ticket prices. Airfares remain market-driven.
Q2. Consider the following statements:
Statement-I: Airfares charged by airlines in India are not directly regulated by the government.
Statement-II: The tariff-setting role of AERA is limited to aeronautical charges at major airports.
Which one of the following is correct in respect of the above statements?
(a) Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
(b) Both Statement-I and Statement-II are correct but Statement-II does not explain Statement-I
(c) Statement-I is correct but Statement-II is incorrect
(d) Statement-I is incorrect but Statement-II is correct
Answer: (b)
Explanation: Both are correct, but fares are unregulated because the sector was deregulated after the repeal of the Air Corporations Act in 1994, not because of AERA’s limited role.
Mains Practice Question
Q. Should airfares in India be left entirely to market forces? Examine in the light of the recent rules under the Bharatiya Vayuyan Adhiniyam, 2024. (10 Marks, 150 words)
Tell Google you want more of this.
Add Anantam IAS as a preferred sourceOne tap, and this site shows up more often in your own Top Stories, AI Overviews and AI Mode. Remove it any time.
