The Federation of Indian Airlines (FIA) has issued a stark warning that the country's aviation industry is "on the verge of closing down" amid soaring jet fuel prices. The body, which represents major domestic carriers including IndiGo, SpiceJet and Air India, has appealed to the Ministry of Civil Aviation for urgent support, saying that the surge in costs has made operations "completely unviable".
In a statement, the FIA said the rise in jet fuel prices by Rs.73 (£0.60) per litre for both international and domestic services has pushed the sector close to collapse. It noted that the increase has led to "significant losses for the aviation sector in April 2026", with operating expenses now accounting for 55 to 60 per cent of airline costs, up from the typical 30 to 40 per cent.
The crisis has been triggered by the ongoing conflict between the US, Israel and Iran, which has resulted in a blockade of the Strait of Hormuz – a critical route for approximately 20 per cent of the world's oil supply. As a result, the price of Brent Crude has soared from $72 (£58) to $118 (£96) per barrel, while aviation turbine fuel (ATF) has rocketed from $87.24 (£70) to a peak of $260.24 (£211) per barrel – a 295 per cent jump. The FIA also highlighted that the rupee has depreciated to its lowest level, adding further burden on airlines.
Describing the situation as "extreme stress", the FIA has put forward three recommendations to the government: restoring the crack band in line with a pre-agreed formula, a temporary suspension of the 11 per cent excise duty on domestic ATF, and a reduction in VAT for major states such as Delhi and Tamil Nadu. The body argues that cities including Mumbai, Bangalore, Hyderabad and Kolkata – which account for over 50 per cent of airline operations – currently face VAT rates of 16 to 20 per cent. "Applying the same framework consistently will ensure parity, reduce the financial burden and enable Indian airlines to compete more effectively with global counterparts," the FIA said.
