Indian Airlines Warn of Shutdown Risk Over ATF Prices

India's major airlines, represented by the Federation of Indian Airlines, have warned the government that the sector is under extreme stress and risks halting operations due to surging aviation turbine fuel prices. In a letter dated April 26 to the Civil Aviation Ministry, the federation, which includes Air India, IndiGo and SpiceJet, urged immediate financial support and reforms to fuel pricing.

The crisis stems from turmoil in West Asia, which has driven up global oil prices, combined with airspace restrictions that have sharply raised costs, particularly on long-haul routes. Aviation turbine fuel, or ATF, accounts for about 40 percent of airlines' operating expenses. The federation highlighted an unprecedented rise in jet fuel prices and wide differentials between crude oil and ATF costs, rendering operations challenging across domestic and international flights.

Last month, the government capped the ATF price increase at 15 rupees per litre for domestic operations. However, international prices rose by 73 rupees per litre, creating what the airlines described as a severe imbalance that has made networks unviable and led to significant losses in April. "Any ad hoc pricing...