Context:

• In December 2025, IndiGo’s operational crisis triggered a sharp rise in airfares nationwide, exposing vulnerabilities in India’s rapidly expanding aviation sector.
• Although the Ministry of Civil Aviation imposed temporary fare caps and the DGCA sought pricing data from major airlines to probe potential market abuse, the episode revealed a deeper issue.
• India, now the world’s third-largest aviation market, lacks robust, real-time data systems to systematically monitor fare patterns.
• While reactive interventions may offer short-term consumer protection, the absence of a sustained analytical framework limits regulators’ ability to distinguish genuine demand-driven price increases from potential misuse of market dominance.
• This article highlights the urgent need for India’s aviation sector to transition from reactive fare controls to a structured, data-driven oversight framework.

Learning from the U.S.: Building a Data-Driven Aviation Regulator

• From Crisis Response to Continuous Oversight
  • The recent fare surge presents an opportunity for India’s DGCA to move beyond reactive interventions toward sustained, data-based regulation.
  • Mature aviation markets like the United States offer a useful template for this shift.
• The U.S. DB1B Model
  • The U.S. Bureau of Transportation Statistics (BTS) maintains the Airline Origin and Destination Survey (DB1B), which publishes ticket-level data for a 10% random sample of all domestic tickets sold each quarter since 1995.
  • The database includes actual fares paid, route details, and carrier information—creating a comprehensive digital trail of airline pricing behaviour.
• Implications for India
  • Unlike the DGCA, which mainly tracks passenger and freight volumes, the DB1B model enables monitoring of pricing trends and market conduct.
  • Adopting a similar 10% sampling framework in India would enhance transparency and help regulators detect abnormal fare patterns over time.
  • Such a system would function like a speed camera—encouraging compliance and maintaining market discipline without constant punitive action.

Transparency as a Check on Airline Pricing Power

• Encouraging Self-Regulation Through Data Disclosure
  • Greater fare transparency can prompt airlines to self-regulate pricing algorithms.
  • When ticket data are open to scrutiny, carriers are more likely to embed safeguards against opportunistic or algorithm-driven price spikes, reducing legal and reputational risks.
• Strengthening Research and Policy Design
  • Public access to long-term pricing data—like the U.S. DB1B dataset—has enabled landmark research, including the “Southwest Effect,” where entry of a low-cost carrier lowers fares and boosts passenger traffic.
  • A similar dataset in India could enhance regulatory insight and academic research.
• Detecting Market Power Through Data Analysis
  • A structured fare database would allow regulators to:
    • Compare routes: Persistently higher fares on monopoly routes may signal dominance.
    • Track entry and exit effects: Fare spikes after competitor exits—or drops upon entry—indicate pricing power.
    • Monitor peak-period pricing: Disproportionate hikes on high-share routes during demand surges may reflect leverage of dominance.
• Resistance to Transparency
  • Opposition to data disclosure typically cites concerns about proprietary information, technical burdens of reporting, and fears of tacit coordination among competitors.

Why a 10% Fare Data Sample Is a Practical Solution?

• Balancing Transparency and Proprietary Protection
  • Airlines often argue that revenue management algorithms are commercially sensitive.
  • A 10% random ticket sample offers a middle path—protecting the proprietary “how” behind pricing systems while revealing the “what,” or actual fares charged.
  • Because only a fraction of total ticket data would be collected, compliance would not impose significant operational or technical strain on airlines.
• Addressing Concerns Over Competitive Coordination
  • Fears that transparency could enable airlines to track competitors are overstated.
  • In today’s environment of real-time data scraping, airlines already monitor market prices.
  • Publishing sampled data with a quarterly delay can further prevent short-term fare alignment.
• From Reactive Controls to Data-Driven Oversight
  • Instead of relying on ad hoc fare caps and investigations, the DGCA should adopt a structured, data-first framework—allowing market competition to function while ensuring informed and continuous regulatory oversight.