Rising ATF, weak rupee, and high airport charges threaten network viability
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AMIT DAVE
These concerns were conveyed to the government in a high level meeting of the Federation of Indian Airlines (FIA) with senior officials of the Ministry of Civil Aviation (MoCA) earlier this week.
FIA represents major carriers including Air India, IndiGo and SpiceJet. The meeting followed multiple representations made by the FIA since the war in the Gulf broke out.
Operations to be cut
Accordingly, flight operations from March 29 could be cut by 10–15 per cent on a year-on-year basis, as well as compared to the ongoing winter schedule, even as the peak summer travel season approaches.
On their part, airlines conveyed to MoCA that unless immediate relief measures are implemented, mounting cost pressures — led by soaring aviation turbine fuel (ATF) prices, high airport charges for parking aircraft, and regulatory constraints on fares — are pushing the sector towards a financially unsustainable position.
Besides, airlines have sought urgent government support to ensure the “situation does not spiral”, warning that continued stress could trigger job losses and erode connectivity.
Airfare caps
Speaking to businessline, several industry sources said that airlines are pushing for the removal of airfare caps and a reduction in airport charges, while seeking relief from elevated ATF prices.
The warnings come amid disruptions linked to geopolitical tensions in West Asia, which have triggered volatility in global crude oil markets and driven up fuel costs.
businessline reached out to the Ministry of Civil Aviation, the FIA, and multiple airlines for comments; however, no responses were received at the time of publication.
However, industry sources indicated that discussions with the government are ongoing, with officials exploring possible measures to support Indian carriers.
Notably, airspace closures on Gulf routes — which account for a significant share of international operations for Indian carriers — have remained in effect for nearly a month, forcing the grounding of aircraft, which are incurring high parking charges.
Rising jet fuel prices
Apart from network disruptions, rising fuel costs remain a key concern. Jet fuel prices across metro cities rose by nearly six per cent in the latest revision earlier this month.
Consequently, airlines have imposed fuel surcharges on both domestic and international routes from March.
Nevertheless, a senior airline executive, speaking to businessline, said the prevailing international jet fuel benchmarks, including Platts Arab Gulf assessments, have more than doubled since the war in West Asia began.
The executive added that ATF accounts for around 40 per cent of airline operating costs.
At the same time, the Centre’s imposition of temporary airfare caps in December has further constrained airlines’ ability to pass on rising costs.
The Ministry of Civil Aviation has so far extended non-financial operational support rather than permitting meaningful cost pass-through measures.
According to sources, airlines warned that if these pressures persist, capacity cuts could be followed by workforce reductions.
“The downsizing might start with non-operating staff, followed by other cadres in the airlines,” another senior airline official said. “Lease renewals might also get affected.”
Industry observers noted that while a calibrated reduction in flights may help maintain operational reliability, it could come at the cost of connectivity, particularly to tier-II and tier-III cities.
Published on March 21, 2026