Supreme Court Seeks Rules for Bharatiya Vayuyan Adhiniyam

Supreme Court Directive on Aviation Rules

The Supreme Court of India has directed the central government to submit the rules framed under the Bharatiya Vayuyan Adhiniyam, 2024, within two weeks. A bench comprising Justices Vikram Nath and Sandeep Mehta issued the order in a case addressing Supreme Court airfare regulation and the broader need for an Indian aviation regulator. The court requested that the government present these rules in a sealed cover, regardless of their current status regarding presentation before Parliament.

The S Laxminarayanan Petition

This legal action stems from a plea filed by social activist S Laxminarayanan, which challenges the current lack of transparency in airline pricing and the erosion of passenger rights. The petition highlights systemic industry trends, specifically airline surge pricing in India and the unbundling of services. A key point of contention is the reduction of free check-in baggage allowances, which private airlines have decreased from 25 kg to 15 kg for economy class passengers. The petitioner argues that the existing Directorate General of Civil Aviation (DGCA) lacks the necessary mechanism to independently regulate pricing practices, leaving passengers vulnerable to exorbitant fares during peak travel periods.

Regulatory Context and Market Dynamics

The Bharatiya Vayuyan Adhiniyam, 2024, which officially came into effect in January 2025, replaces the 90-year-old Aircraft Act of 1934. The Ministry of Civil Aviation (MoCA) is now tasked with drafting the specific rules that will govern the sector under this new framework. Historically, the industry has operated under Rule 135 of the Aircraft Rules, 1937, which mandates that airlines establish tariffs based on operating costs and reasonable profit. However, petitioners contend that this rule has failed to prevent predatory pricing.

Industry operators and the International Air Transport Association (IATA) argue that dynamic pricing is essential for commercial viability, citing the volatility of Aviation Turbine Fuel (ATF) costs. This perspective contrasts with the regulatory interventions seen during the COVID-19 pandemic, when the government imposed temporary price bands from May 2020 to August 2022 to prevent gouging. The 1994 repeal of the Air Corporations Act, which ended the state monopoly, initiated the deregulation that led to the current dynamic pricing models now being scrutinized by the court.

Technical Analysis of the Regulatory Gap

The current dispute centers on the transition from a deregulated market to one that may require stronger consumer oversight. The data suggests that airlines increasingly rely on ancillary revenue—such as charges for baggage, seat selection, and meals—to maximize yields. This shift, combined with algorithmic pricing during festivals, has prompted the judiciary to seek a more robust regulatory mechanism. If the court enforces stricter fare caps or mandates minimum baggage allowances, it could significantly impact the revenue models of private carriers like IndiGo, Air India, and Akasa Air. The outcome of this case may necessitate the creation of a dedicated economic oversight wing, effectively shifting authority away from the DGCA's traditional safety-focused mandate.

Next Steps in the Legal Process

The government is expected to submit the finalized rules by late July 2026. The matter is scheduled for its next hearing on August 3, 2026, where the Supreme Court will evaluate whether the new rules under the 2024 Act provide sufficient protection against the issues raised in the petition.

Why This Matters for Passengers

This case represents a critical inflection point for consumer protection in the Indian aviation sector. For passengers, the outcome could lead to standardized baggage policies and relief from extreme price volatility during festive seasons. For the aviation industry, the court's intervention signals a potential move toward re-regulation, testing the balance between airline operational freedom and the state's interest in safeguarding the traveling public.