The government on Friday rejected a submission by airlines to categorise fares on the basis of distance and warned of action if carriers hiked fares arbitrarily.
The airlines' proposed km slabs could have meant even low-cost carriers would charge over Rs 20,000.
Civil aviation minister Praful Patel said the passenger couldn't be expected to calculate the distance between two places and airlines must provide sector-wise, category-wise and period-wise slabs.
"We don't accept the km slabs. A passenger is only concerned about the fare from point A to B," he said.
Hoping the "extraordinary" fare hike during Diwali wouldn't be repeated during Christmas, he said that if need be, the government would use its powers to rein in the airlines.
"While the government or Directorate General of Civil Aviation (DGCA) are not in the business of regulating fares on a daily basis, we can't be mute spectators... There can be no justification for airlines to hike fares in an arbitrary manner," he said. "What is the earth-shattering reason that a ticket that costs Rs 10,000 today costs Rs 20,000 tomorrow?"
"It is exploitation. Airlines have formed a cartel... Because of the holiday season, getting a train reservation is difficult and helps airlines," said R Desikan of Consumer Association of India.
However, aviation experts debunked the cartelisation theory, saying only last-minute tickets were selling at doubled rates-a common practice.
Patel announced a slew of measures to deal with the crisis but it wasn't clear if these would have immediate effect. He has formed a Civil Aviation Economic Advisory Council to ensure "transparency in the disclosure of tariffs and conditions of service to passengers".
The council, which will meet on December 10, will have the CEOs of all scheduled airlines and airport operators, representatives of industry associations, representatives from consumer forums as members.
"Top airline executives have been summoned. If necessary, DGCA will ask them to do what it deems necessary for the good of the public," Patel said.
If required the government will seek the support of the Competition Commission of India.
"Airlines will reduce fares by January as demand drops," said Ankur Bhatia, ED, Bird Group.
Inputs from Soubhik Mitra