Indian Airlines Seek Government Relief Amid Rising Fuel Costs

The Federation of Indian Airlines (FIA), representing Air India, IndiGo, and SpiceJet, has petitioned the Indian government for urgent financial relief to combat rising operating costs. In a letter to Civil Aviation Minister Kinjarapu Rammohan Naidu, the industry body cited severe financial pressure caused by the West Asia conflict, which has led to airspace restrictions, flight diversions, and the depreciation of the Indian Rupee.

The FIA reported that aviation turbine fuel (ATF) costs have surged from 30-40% to 55-60% of total operating expenses, driven by Brent crude prices rising from $72 to $118 per barrel. To mitigate these losses, the federation is requesting a 25% reduction in landing and parking charges and a transition from an ad valorem excise duty to a fixed-rate structure.

A central demand of the petition is a review of the ATF pricing formula. The FIA proposes moving away from the international Mean of Platts Arab Gulf (MOPAG) benchmark to a cost-plus model based on actual fuel costs plus a reasonable margin. Additionally, the group urged the government to extend 7% VAT relief in Delhi and Maharashtra beyond mid-November 2026 and implement similar tax cuts in Tamil Nadu, West Bengal, Karnataka, and Telangana. The association warned that if timely relief is not provided, carriers may be forced to withdraw from unsustainable routes.