Airlines Body Warns Of Operational Crisis Due To Surge In Aviation Turbine Fuel Prices
Airlines body warns rising jet fuel costs threaten operations, seeks urgent government support to avoid shutdowns.
Indian airlines have warned of potential shutdowns or suspension of operations if the government does not step in to address soaring aviation turbine fuel (ATF) prices, according to a communication from the Federation of Indian Airlines (FIA). The industry body, which represents major carriers such as Air India, IndiGo, and SpiceJet, has urged immediate intervention to ensure the sector’s survival.
In a letter addressed to the Civil Aviation Secretary, the FIA highlighted that both domestic and international operations are becoming increasingly unviable due to an unprecedented surge in jet fuel prices. The association warned that airlines are under severe financial strain and could be forced to scale down or halt services if relief measures are not introduced promptly.
The spike in fuel costs has been linked to disruptions in global crude oil supply caused by the ongoing Iran war, now in its second month. The conflict has driven up petroleum prices worldwide, with ATF—already the single largest expense for airlines—witnessing particularly sharp increases, significantly impacting operational viability.
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According to the FIA, the rising cost burden has weakened airline networks and strained their ability to maintain schedules and profitability. The association emphasized that the unusually high “crack spread”—the difference between crude oil and refined products like ATF—has further compounded the crisis, making cost management increasingly difficult for carriers.
To address the issue, the FIA proposed a “crack band” pricing mechanism that would allow oil marketing companies to recover increases in crude oil costs while maintaining reasonable margins. The body stated that such a framework would balance the interests of fuel suppliers and airlines, ensuring transparency and sustainability in pricing without destabilizing the aviation sector.
Describing the situation as “highly precarious,” the FIA called for urgent and meaningful financial support from the government. It stressed that immediate intervention is critical for airlines to survive the current crisis and continue operations, warning that delays in action could have far-reaching consequences for India’s aviation industry and broader economy.
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