Indian airlines seek government help on jet fuel prices

Indian airline companies have sought government help as surging jet fuel prices threaten commercial viability.

The Federation of Indian Airlines (FIA) – an industry body that represents the top carriers, including Air India, IndiGo, and SpiceJet – said in a letter that “urgent support is required for ATF pricing to continue” airline operations. “The airline industry in India is under extreme stress and on the verge of closing down or of stopping its operations.”

The FIA said the aviation turbine fuel (ATF) pricing has become “increasingly unpredictable,” impacting domestic and international operations. “ATF adhoc pricing is creating severe imbalance in domestic and international operations and rendering airline networks unviable and unsustainable.”

Earlier this month, India hiked fuel prices for international flights and marginally increased energy prices for domestic routes.

The surge in ATF costs has increased airline operation costs from 30%-40% to 55%-60%, the FIA said.

The FIA’s move comes amid mounting speculation that the government will raise fuel prices once voting in state elections ends on April 29, Bloomberg reported.

On Tuesday, officials denied plans to raise gasoline prices but declined to answer a similar question on ATF.

More than 15,400 flights operated by Indian carriers were canceled from February 28 to April 24, CNBC TV18 reported on Monday. It said Indian carriers are now operating just 50-55 flights a day to the Middle East, compared to nearly 200 daily services earlier.

This is the first time ATF prices in India have surpassed the $2,145.36 per kiloliter mark. The previous high was recorded in 2022, when rates climbed to around $1,180 per kiloliter following the escalation of the Ukraine conflict.

In India, state-backed fuel retailers normally revise ATF prices on the first day of every month based on international benchmarks and exchange rates. The prices were deregulated in 2001.