The Indian Airlines Association has called on the Civil Aviation Ministry to provide urgent assistance, noting that the current prices of aviation turbine fuel are causing severe pressure on the industry. In a letter to the Centre, the FIA added that this pressure has pushed the aviation industry to the brink of collapse.
“India’s aviation industry is under severe pressure and is on the verge of shutting down or halting operations. The dire state of the aviation sector has been exacerbated by the West Asian War and exorbitant increase in ATF fares,” the letter said.
The association also added that due to the increase in ATF price by Rs 73 per litre, international operations have made flight operations “totally unviable”.
“ATF prices for international operations have been hiked by Rs 73 per litre, practically making international operations along with domestic operations completely unviable and resulting in huge losses to the aviation sector in April 2026,” the FIA said.
The Aviation Authority added, “The pricing results on April 26 do not guarantee parity between local and international operations.”
The revised prices for aviation turbine fuel come amid an oil and gas supply crisis resulting from the US-Israel war on Iran.
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The ongoing conflict has led to the closure of the Strait of Hormuz, a vital passage for about 20% of global energy supplies.
“The current conflict pushed Brent crude from US$72 per barrel to US$118 per barrel, and the resulting ATF price (MOPAG+Premium) moved from US$87.24 and touched a high of US$260.24 per barrel (up 295%) and is currently trading at US$235.63 per barrel, which is much higher compared to March 25 prices,” the aviation authority noted.
The FIA also stated that ATF pricing typically ranges between 30 to 40 percent of the airline’s cost. However, with prices rising due to the US-Iran war, the increase in ATF costs has now pushed airline operating costs to 55 to 60 percent.
“In addition, the value of the rupee has also fallen to its lowest level, adding an additional burden on airlines in terms of ATF pricing,” the authority also noted.
In response to the current crisis, the Aviation Authority presented three proposals to the government. This is –
- Return the crack band in line with a pre-agreed formula. The crack spread refers to the margins achieved by refineries to convert crude into the finished product
- Temporary deferral of excise duty on aviation turbine fuel. The current ATF fee is 11 percent for domestic operations.
- VAT reduction in key states like Delhi and Tamil Nadu. The aviation authority adds that although more than 50 per cent of airline operations are covered within India, cities like Mumbai, Bangalore, Hyderabad and Kolkata have VAT rates ranging between 16 to 20 per cent.
“Applying the same framework consistently will ensure parity, reduce the financial burden and enable Indian airlines to compete more effectively with their global counterparts,” the FIA added.
