Air India, IndiGo, SpiceJet Warn Government: Flights May Be Grounded Amid Soaring ATF Prices

India’s leading airlines have warned the Centre that they may be forced to ground aircraft and suspend operations if immediate relief is not provided from sharply rising Aviation Turbine Fuel (ATF) prices.

In an urgent letter dated April 26 to the Ministry of Civil Aviation, the Federation of Indian Airlines (FIA) — representing Air India, IndiGo and SpiceJet — said the Indian aviation sector is under “extreme stress” and is on the verge of shutting down due to mounting fuel costs and adverse global conditions.

The airlines have sought immediate government intervention to rationalise ATF pricing, restore a uniform fuel pricing mechanism for domestic and international flights, and provide meaningful financial support to keep operations viable.

According to FIA, the ongoing geopolitical tensions in West Asia have pushed global crude oil prices sharply higher, while airspace restrictions across several regions have significantly increased operational expenses, especially for long-haul international flights. The body noted that ATF alone accounts for nearly 40 per cent of an airline’s total operating expenditure, making the recent spike financially unsustainable.

In its strongly-worded communication, FIA said that any irrational increase in ATF prices or ad hoc differential pricing between domestic and international operations would result in “insurmountable losses” for airlines and could lead to grounding of aircraft and large-scale cancellation of flights.

The airlines have also urged the government to temporarily suspend the 11 per cent excise duty levied on ATF. They argued that the abnormal increase in jet fuel prices, coupled with the depreciation of the rupee, has sharply inflated operational costs and further weakened the financial health of carriers.

Industry sources pointed out that while the government had capped the increase in ATF prices for domestic flights at Rs 15 per litre last month, fuel prices for international operations were raised by a steep Rs 73 per litre. This has severely impacted international routes and led to substantial losses during April, the FIA said.

The federation warned that the present pricing framework has created a major imbalance between domestic and overseas operations, making the entire airline network unstable and commercially unviable.

“The airline industry in India is under extreme stress and is on the verge of closing down or stopping its operations,” the FIA said, while requesting urgent and meaningful financial assistance from the government to survive the ongoing crisis.

The development signals one of the most serious warnings issued by Indian carriers in recent years, with passengers likely to face higher airfares, reduced flight frequencies and possible route suspensions if the crisis deepens further.