India’s leading airlines have issued a critical warning about the rising costs of Aviation Turbine Fuel (ATF), which threaten to cause operational disruptions across the country. In a formal letter to the Ministry of Civil Aviation, the Federation of Indian Airlines (FIA), representing major carriers including Air India, IndiGo, and SpiceJet, expressed concern that escalating fuel prices could push some airlines toward shutdown if immediate measures are not taken.
The report highlights that ATF costs have surged by ₹73–75 per litre on international routes, significantly impacting their viability and leading to considerable losses. Overall, fuel now accounts for over half of the airlines’ operational expenses, a sharp increase from previous levels, creating a "non-operatable" financial environment for many carriers.
The FIA also pointed out that high crack spreads and refinery margins are sustaining elevated fuel prices, even as global crude oil prices soften. The organization has called on the government to intervene, recommending the suspension of 11% excise duty on ATF for domestic flights, the reintroduction of a "crack band" pricing system, and VAT reductions at key hubs to alleviate the financial burden.
Warning that continued volatility could lead to aircraft grounding and flight cancellations, the FIA emphasized the need for a coordinated approach to stabilize costs. The industry highlighted additional pressures from airspace disruptions and currency depreciation. Without prompt action, these combined factors could threaten the stability and connectivity of India's aviation sector.
