• The Directorate General of Civil Aviation (DGCA) issued a circular on May 21, 2020, stating that airlines must adhere to a price band for domestic flights as they resume services after a two-month suspension due to COVID-19.
• The price range for domestic flights was determined based on the duration of the flight; for example, flights between 0-40 minutes must have a minimum fare of INR 2,000 and a maximum fare of INR 6,000.
• This price band was applicable for 3 months initially and has been extended multiple times but as of June 2021, it has been removed completely due to decreasing airline losses and increase in passenger demand.
• This decision was taken to ensure that airlines do not overcharge for flights during the pandemic and provide affordable options to passengers.
• While the government's decision was praised for helping consumers, the airline industry expressed concern over its potential impact on their already struggling finances.
• However, the capping of airfares did help smaller airlines such as SpiceJet and IndiGo to increase their market share by attracting budget-conscious passengers.
• Furthermore, the move had a cascading effect on other sectors such as tourism, where affordable air travel increased the demand for travel and boosted the industry.

In summary, the government's decision to cap airfares during the pandemic helped ensure that flights remained affordable for passengers. While there were concerns raised by the airline industry, the policy proved beneficial for smaller airlines and other sectors such as tourism. The recent decision to remove the price band indicates a return to market forces dictating fares.