Indian airlines warn fuel crisis could force flight suspensions

India’s airlines have warned the government they may be forced to suspend operations as soaring fuel prices triggered by the Middle East conflict push the sector deeper into crisis.

At least three carriers, including Air India, have urged New Delhi to revise aviation turbine fuel (ATF) pricing and provide emergency financial relief, according to a letter sent by the Federation of Indian Airlines (FIA) to the Civil Aviation Ministry, Caliber.Az reports via foreign media.

The FIA, which represents Air India, IndiGo and SpiceJet, said sharp increases in fuel costs were threatening the viability of airline operations.

“Any ad hoc pricing and/or irrational increase in the price of ATF will result in insurmountable losses for airlines and will lead to grounding of aircraft, resulting in cancellation of flights,” the federation said in the April 26 letter.

The group called for “urgent intervention” from the government, warning that carriers were struggling to sustain operations as fuel costs surged.

Airlines said long-haul international routes had been hit particularly hard after ATF prices for overseas operations rose by Rs 73 ($0.80) per litre, compared with a capped increase of Rs 15 ($0.17) per litre for domestic flights.

The carriers urged authorities to restore a pricing mechanism known as the “crack band”, previously used to limit extreme differences between crude oil and refined ATF prices across domestic and international operations.

The industry body also sought a temporary suspension of the 11% excise duty on ATF, arguing that the tax burden had risen sharply alongside higher fuel prices and the weakening rupee.

The crisis follows the escalation of tensions between Iran and the United States, as well as Tehran’s blockade of the Strait of Hormuz — a critical shipping route through which roughly a fifth of global oil supplies pass.

The waterway is used to transport oil and gas exports from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran, with much of the supply destined for Asian markets.

By Aghakazim Guliyev