To give more pricing flexibility to airlines, Centre has expanded the airfare cap, sources said on Thursday.
Accordingly, the lower fare band has been increased by 10 per cent, while the upper cap has been raised by 30 per cent.
Notably, the move comes after consistent rise in domestic passenger numbers.
At present, the applicability time period of fare bands within which the airlines have to operate is till Feb 24, 2021.
These fare bands came into force with effect from May 21, 2020.
Recently, Union Civil Aviation Minister Hardeep Singh Puri in Parliament said the fixed minimum and maximum air fare structure for the domestic sector will be removed once passenger traffic reaches per-Covid levels.
Under the fare structure, air routes are divided into seven sections based on travel time. Each section has its minimum and maximum fares.
Accordingly, Delhi-Mumbai ticket price has been fixed at Rs 3,500-Rs 10,000.
Currently, the airlines can operate up to 80 per cent of their pre-Covid capacity.