parts of the industry are “on the verge of shutting down”.
India’s aviation sector is facing mounting pressure as airlines warn that rising aviation turbine fuel (ATF) prices are threatening the stability of operations.
In a letter dated April 26, 2026, to the Ministry of Civil Aviation, the Federation of Indian Airlines, which represents Air India, IndiGo and SpiceJet, warned that parts of the industry are “on the verge of shutting down”.
The industry body said the increase in fuel costs, driven by global crude price movements and refining margins, is putting strain on both domestic and international operations.
It said in the letter: “In order to survive, sustain and continue operation, we request your urgent intervention for immediate and meaningful financial support to tide over the current situation.”
ATF pricing in India is linked to the Mean of Platts Arab Gulf benchmark, but airlines have raised concerns over sharply increased refining margins, known as the “crack spread”.
The FIA reportedly said margins that previously ranged between £9 and £14 per barrel have now risen to over £103 per barrel, despite relatively stable refining costs.
During the same period, Brent crude has increased from around £57 per barrel to £94 per barrel.
ATF prices have reached as high as £205 per barrel at peak levels, before settling at around £185 per barrel.
The widening gap between crude oil prices and final fuel costs has added pressure on airlines.
Fuel now accounts for 55-60% of airline operating costs, up from around 40% previously.
Airlines have also highlighted additional challenges, including airspace restrictions linked to the West Asia situation and the continued closure of Pakistani airspace for Indian carriers, increasing flight times and costs.
A weakening rupee has further raised the cost of dollar-denominated expenses.
Domestic ATF prices were partially capped in April at around Rs. 15 per litre.
International fuel prices rose by about Rs. 73 per litre in the same period.
The FIA reportedly said this has made overseas operations “completely unviable”.
Airlines have called for temporary tax relief, including suspension of the 11 per cent excise duty on domestic ATF and reductions in state-level VAT.
With the next monthly ATF price revision scheduled for May 1, the industry has urged immediate government intervention.
Industry stakeholders said urgent clarity is needed ahead of the upcoming revision cycle scheduled for May 1 by authorities.
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