New Delhi: On Monday (November 2), the Union government stepped into the airline sector with new rules, giving itself more powers to regulate flight ticket prices. On the same day, the Supreme Court dismissed a plea mentioned before it to control “extremely high” ticket prices, telling the advocate, “Don’t travel by air. Next case.”The new aviation rules are understood to be a result of the Supreme Court saying it would step in to regulate flight prices during festival seasons.Airlines have said prices are skyrocketing due to elevated Aviation Turbine Fuel (ATF) prices. The continued hike in ticket costs has contributed to forcing the government to intervene in a sector that has more or less independently determined ticket prices for 32 years. The new rules will kick in on January 1, 2027.The developments come against the backdrop of a petitioner, S. Laxminarayanan, who had approached the Supreme Court in 2025 with a Public Interest Litigation (PIL), saying that aviation fares had increased during the Kumbh festival to 700% of normal fares, reports Live Law.The petitioner has said that the increase in ATF does not explain why airline ticket costs are skyrocketing. As per a previous report on Live Law, the PIL said:“The airlines attribute such fares to the cost of aviation turbine fuel, and Respondent No. 1 (Union of India) has publicly echoed that explanation. It does not bear scrutiny. The fuel burnt by the 5:00 AM and the 3:45 PM flight on the same route and day is the same, yet one fare is over two and a half times the other. During the hearing on 13.07.2026, this Hon’ble Court noticed that airlines cite fuel prices and geopolitical events to justify increases of 100% to 300%, though the impact of fuel on cost is small. A rise in fuel cost may justify a marginal revision, never a fare of seven times the ordinary fare,” the application states.Advocate Abhinav, representing the petitioner, had again approached the court on October 30 this year, saying that air travel is an essential service and excessively high prices amount to a violation of Article 14 of the Constitution.The bench of Justice Vikram Nath, Justice Sandeep Mehta and Justice Aparesh Singh was presiding. “Don’t travel by air. Next case,” Justice Nath responded on Monday, November 1, refusing to list the matter.The larger case behind the plea – S. Laxminarayanan’s PIL – seeks intervention against algorithm-based dynamic pricing, steep increases in ticket prices at short notice and ancillary charges by airlines. It will continue being heard.The next date of hearing is November 16, said Live Law. The PIL also seeks interim directions to cap airfares during festival periods and restore the free checked baggage allowance in economy class to 25 kg.Also read: Rising Airfare, Plummeting LNG Imports: West Asia Conflict Takes Toll on Indian EconomyHowever, recent reports indicate that airlines are scheduling fewer flights during the 2026 holiday (Diwali) month, as a result of pressure from the depreciating rupee and the crisis in fuel supplies and costs caused by the West Asia wars.Government steps in twice – hikes ATF, demands transparencyNow the government has notified rules under the Bharatiya Vayuyan Niyam, 2026, saying the base fare, taxes, fees, cancellation charges, refund conditions and additional charges must be declared to passengers clearly.The rules say that the fare breakup must declare the costs on account of government fees and taxes and those charged by the airline, said a report in the Economic Times.This came as a belated response to the Supreme Court’s push. At a January 2026 hearing of the same PIL, Justice Mehta had said, “We will interfere. Look at the exploitation you did in Kumbh…,” while addressing Additional Solicitor General Anil Kaushik. “Not only Kumbh, but every festival,” Justice Nath had said, as per a Live Law report.Meanwhile on Sunday (November 1), new hiked Aviation Turbine Fuel (ATF) prices (up by Rs 1.37 per litre) as well as commercial cooking gas prices (upped by Rs 10 per litre) took effect. This was the fourth straight month in a row when ATF prices were increased by the government.In Delhi, ATF was priced at Rs 121.28 per litre for market-linked consumers, following a Rs 6.28 per litre price hike on September 1, 2026.The airline sector has been telling the government that it is in a crisis ever since the West Asia conflict escalated in February 2026, due to curtailed flight routes, escalating ATF costs and the heightened security risks.The sector, represented by the Federation of Indian Airlines (FIA), wrote to the Union Ministry of Civil Aviation seeking “urgent intervention” and warning that it was being pushed towards a “potential shutdown” of operations.The FIA, which represents carriers including Air India, IndiGo and SpiceJet, said that the current pricing environment had placed the industry under “extreme stress” and brought it to the verge of stopping operations.On top of the transparency declarations, the government has now said that it will issue directions to airlines on fares if it considers intervention necessary in an “extraordinary situation”.Also read: India Needs a Strong Airline Industry – Not Just Strong AirlinesAirlines will henceforth have to declare how they are arriving at ticket prices to the Directorate General of Civil Aviation (DGCA). The changes formally mark an end to market-determined air fare costs, in place since 1994.Earlier, the DGCA could issue directions in cases of excessive or predatory pricing or oligopolistic practices in the aviation sector. Now, the rules do not mention these qualifications for the aviation regulator to intervene – it can do so in “the public interest”.If the Union government comes to the conclusion that an “extraordinary situation” has arisen, it may issue written directions to airlines regarding their pricing, said a report in Business Today. So far, the DGCA could monitor prices, but not intervene in what was seen as supply-and-demand-led price changes.Sector faces crisisThe Business Standard has reported that 2.6% fewer flights-per-week have been scheduled in the Diwali 2026 month (November) than last year due to high prices and subdued demand. There are 22,306 weekly flights scheduled this month compared with 22,912 in October 2025, according to aviation analytics Cirium’s data reviewed by the publication.Air India saw the biggest cut in scheduled flights, by close to 15%, and IndiGo has reduced its weekly flights by 2.7% or 375 fewer flights a week, said the publication.IndiGo, the biggest aviation player, posted net losses of Rs 1,879 crore in the quarter ended September 30.Meanwhile, the rupee depreciated 21 paise to 94.97 against the US dollar on Monday during early trades, continuing the pressure on Indian markets.In March 2026, ratings agency ICRA changed its outlook on the Indian aviation industry to “negative” from “stable” owing to disruptions in the availability of international airspace starting February 28, when the conflict in West Asia escalated. The change in outlook was “coupled with a sharp depreciation of the INR against the USD and expected hardening of aviation turbine fuel prices”.