India’s aviation industry is navigating a turbulent phase as rising fuel costs threaten operations.

Major carriers have raised alarms, warning of severe consequences without immediate government support.

The Federation of Indian Airlines, representing key players like Air India, IndiGo, and SpiceJet, has flagged the sector’s “extreme stress.”

Aviation turbine fuel (ATF) alone accounts for nearly 40 per cent of airline expenses. Therefore, recent price spikes have sharply increased operational costs.

The situation has worsened due to global factors. Ongoing tensions in West Asia have pushed fuel prices higher, especially impacting international routes. As a result, airlines are facing mounting losses and shrinking margins.

To address this, the FIA has approached the government with urgent demands. It has called for a reduction in ATF prices and financial relief measures.

Additionally, airlines want the suspension of the 11 per cent excise duty on jet fuel. A uniform pricing system for domestic and international operations has also been proposed.

Meanwhile, fuel prices have risen steeply. ATF costs increased by about ₹73 per litre for international flights last month.

Consequently, airlines warn that continued pressure could lead to grounded aircraft and cancelled flights.

Taxes further compound the issue. In Delhi, VAT on jet fuel stands at nearly 25 per cent, while other states impose rates as high as 29 per cent.

However, key aviation hubs like Mumbai, Bengaluru, Hyderabad, and Kolkata maintain slightly lower rates between 16 and 20 per cent.

Moreover, currency depreciation has intensified the burden. As the rupee weakens, fuel imports become costlier, increasing overall expenses. The excise duty adds another layer of financial strain.

The Federation of Indian Airlines has called for urgent government support to tackle rising fuel costs. Without quick action, airlines may face disruptions, including grounded flights.

The next few weeks are critical, as timely intervention will determine whether India’s aviation sector stabilises or slips into a deeper operational and financial crisis.

Image from Pxhere (Free for commercial use / CC0 Public Domain)

Image Published on May 11, 2020

Image Reference: https://pxhere.com/en/photo/1612630