The Federation of Indian Airlines (FIA) has raised concerns about the aviation industry in India facing imminent closure. The FIA has sought assistance from the Ministry of Civil Aviation, attributing the critical situation to escalating jet fuel costs that are exerting immense pressure on the sector. Major domestic carriers represented by the FIA, such as IndiGo, SpiceJet, and Air India, are reportedly on the brink of collapse due to these mounting financial challenges.
The FIA highlighted that a significant increase in jet fuel prices by Rs.73 (£0.60) per liter for both international and domestic flights has rendered operations economically unfeasible. This surge in costs has resulted in substantial losses for the aviation sector in April 2026, according to the FIA. The organization emphasized that the industry is under severe strain, exacerbated by the West Asia conflict and the exorbitant spike in Aviation Turbine Fuel (ATF) prices. The disparity between domestic and international operations due to the latest pricing results further compounds the sector’s woes.
The recent surge in aviation fuel charges follows the oil and gas supply emergency triggered by the conflict involving the US, Israel, and Iran. The ongoing tensions have disrupted the critical supply route through the Strait of Hormuz, impacting about 20% of global supply. Consequently, the price of Brent Crude has surged from $72 per barrel (£58) to $118 per barrel (£96), leading to a 295% increase in ATF prices, now hovering around $235.63 (£190) per barrel.
The FIA emphasized that ATF costs typically constitute 30 to 40% of an airline’s expenses. However, with the recent geopolitical tensions, these costs have escalated, pushing operating expenses to 55 to 60%, as reported by the Express. The FIA also highlighted the depreciation of the Rupee, which further burdens airlines in terms of ATF pricing.
In response to the crisis, the FIA has proposed three key recommendations to the government. These include restoring the crack band based on a pre-agreed formula, temporarily suspending the excise duty on ATF, and reducing VAT rates for major states like Delhi and Tamil Nadu. The FIA stressed the importance of consistent application of these measures to ensure fairness, alleviate financial strain, and enhance the competitiveness of Indian airlines globally.