Air India, IndiGo, SpiceJet seek ATF price relief, say airline industry on verge of ‘stopping operations’

India’s aviation sector has sounded a strong alarm, with major carriers warning that soaring fuel costs could force them to halt operations if immediate relief is not provided. Airlines including Air India, IndiGo and SpiceJet have approached the government through the Federation of Indian Airlines, seeking urgent financial support and policy intervention as Aviation Turbine Fuel (ATF) prices continue to surge.

The crisis has been triggered by ongoing geopolitical tensions in West Asia, which have driven up global oil prices and led to airspace restrictions, significantly increasing operational costs—especially for long-haul international routes. Airlines noted that ATF alone accounts for nearly 40 per cent of total operating expenses, making the current price spike particularly unsustainable.

In a communication to the civil aviation ministry, the federation warned that any irrational or uneven pricing of ATF between domestic and international operations could lead to “insurmountable losses.” It stated that such conditions may result in grounding of aircraft and widespread flight cancellations, severely disrupting the aviation network across the country.

Airlines have specifically requested a uniform fuel pricing mechanism across domestic and international routes, similar to the earlier “crack band” system, to reduce volatility. They have also sought a temporary deferment of the 11 per cent excise duty on ATF, arguing that rising fuel prices combined with currency depreciation have sharply increased operational burdens.

The situation has further worsened due to a steep hike in ATF prices for international operations, making many routes financially unviable. The federation warned that unless corrective measures are implemented immediately, the aviation industry could face a severe downturn, with long-term implications for connectivity, employment, and economic activity.