The Federation of Indian Airlines has called on the Ministry of Civil Aviation for urgent assistance, stating that the current pricing of Aviation Turbine Fuel is causing extreme stress on the industry. In a letter to the Centre, the FIA adds that this stress has brought the airline industry to the brink of collapse.
"The airline Industry in India is under extreme stress and is on the verge of closing down or of stopping its operations. The dire condition of the Aviation Sector has been exacerbated by the West Asia War and the exorbitant increase in the price of ATF," the letter reads.
The federation further added that due to the increase in ATF price by Rs.73 per litre, international operations have made flight operations "completely unviable"
"The ATF pricing for international operations was increased by Rs.73 per litre, making practically international operations along with domestic operations completely unviable and resulting in significant losses for the aviation sector in April 2026," said FIA.
"The April’26 pricing outcomes do not ensure parity between domestic and international operations," the airline body added further.
The revised prices for aviation turbine fuel come amid the oil and gas supply crisis brought on by the US and Israel's war on Iran.
{{/usCountry}}The revised prices for aviation turbine fuel come amid the oil and gas supply crisis brought on by the US and Israel's war on Iran.
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The ongoing conflict has led to a blockade of the Strait of Hormuz, a vital passage for around 20 per cent of the world's energy supply.
"The current conflict has pushed the Brent Crude from US$ 72 / BBL to US$ 118 / BBL, and resultant ATF price (MOPAG + Premium) has moved from US$ 87.24 and touched a high of US$ 260.24 / BBL (295% increase) and is currently trading at US$ 235.63 / BBL, significantly higher as compared to March’25 pricing," the airline body noted.
The FIA further stated that ATF pricing is usually around 30 to 40 per cent of the airline's cost. However, with pricing rising due to the US-Iran war, the increase in ATF costs has now pushed airline operating costs to 55 to 60 per cent.
"Add to this, the Rupee has also depreciated further to its lowest level, adding additional burden on Airlines in terms of ATF Pricing," the body noted further.
In response to the current crisis, the airline body has offered three suggestions to the government. These are -
- Reinstatement of crack band in-line with a pre-agreed formula. Crack spread refers to the margins made by refineries to convert crude to the final product
- Temporary deferment of excise duty of Aviation Turbine Fuel. The current duty for ATF stands at 11 per cent for domestic operations.
- Reduction of VAT in key states such as Delhi and Tamil Nadu. The airline body adds that despite covering over 50 per cent of airline operations within India, cities such as Mumbai, Bangalore, Hyderabad and Kolkata have VAT ranged 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 global counterparts," the FIA added further.