The Federation of Indian Airlines (FIA) has raised concerns about the aviation industry in India facing imminent shutdown. FIA has sought assistance from the Ministry of Civil Aviation, citing the significant financial strain caused by escalating jet fuel costs. The association, representing major domestic carriers like IndiGo, SpiceJet, and Air India, emphasized that these soaring costs are pushing the sector to the brink of collapse.
Due to a substantial increase in jet fuel prices for both international and domestic services, operations have become unfeasible, with the aviation sector experiencing substantial losses in April 2026. The FIA highlighted that the industry is under immense pressure, exacerbated by the West Asia conflict and the sharp rise in Aviation Turbine Fuel (ATF) prices. The recent pricing adjustments for aviation fuel are a consequence of the oil and gas supply emergency triggered by the US and Israel’s tensions with Iran, leading to a blockade of the critical Strait of Hormuz.
The conflict has caused a surge in Brent Crude prices, resulting in a 295% increase in ATF prices, currently trading at $235.63 per barrel. The FIA noted that ATF costs typically account for 30 to 40 per cent of an airline’s expenses, but the recent surge has elevated operating expenses to 55 to 60 per cent. Additionally, the depreciation of the Rupee has further burdened airlines in terms of ATF pricing.
To address the crisis, the FIA has proposed three key recommendations to the government, including restoring the crack band margins, temporarily suspending excise duty on ATF, and reducing VAT rates in major states like Delhi and Tamil Nadu. The FIA emphasized the importance of applying consistent frameworks to ensure parity, alleviate financial strains, and enhance the competitiveness of Indian airlines on a global scale.
