India’s airlines industry has urged the government to step in as rising aviation turbine fuel (ATF) prices put severe pressure on operations and profitability. The Federation of Indian Airlines (FIA), representing major carriers like Air India, IndiGo, and SpiceJet, informed the Civil Aviation Ministry that the sector is facing extreme financial stress due to the sharp increase in jet fuel costs.
ATF prices have crossed Rs 2 lakh per kilolitre in recent weeks, mainly because of rising global crude oil prices linked to tensions in West Asia. Since fuel usually makes up 30–40% of airline expenses, the current surge has pushed that share to nearly 55–60%, creating a major burden on airline finances and reducing profit margins significantly.
The FIA said many domestic and international routes are becoming financially difficult to operate, especially international flights where fuel costs are naturally higher. Airlines are finding it hard to absorb these expenses, and if prices stay high, they may be forced to review operations, reduce capacity, or make changes to existing routes.
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Indian Airlines Seek Urgent Relief as Rising Fuel Prices Threaten Operations
To ease the pressure, the industry body has requested the temporary removal of the 11% excise duty on ATF and asked states to lower VAT rates, which can reach up to 25% in some places. Airlines have also demanded a more stable fuel pricing system, saying ATF prices remain high even when crude oil prices fall, making financial planning difficult.
The ongoing conflict in West Asia and concerns over important supply routes like the Strait of Hormuz have further increased global oil market uncertainty. If fuel prices continue to rise without tax relief, airlines may increase ticket fares, reduce flight frequency, and cut less profitable routes, directly affecting passengers through higher travel costs and fewer flight options.
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