Archive · 6 Oct 2026
Indian Airlines Seek Relief as West Asia Conflict Raises ATF Costs
A group representing some of India’s airlines says flying has become much more expensive.
It says jet fuel now takes up a larger share of the airlines’ costs than before.
The group links the increase to the West Asia conflict, fuel pricing, and other pressures.
Airlines say they cannot quickly raise fares to cover costs because many tickets are sold in advance.
Longer routes and other operating expenses are also adding pressure, according to the articles.
The group has asked the government to change how jet fuel prices and taxes are calculated.
It also wants some existing tax relief and other support measures to continue.
It warns that airlines could cut routes if they do not receive timely help.
The Federation of Indian Airlines, whose members include Air India, IndiGo and SpiceJet, has asked the government for support amid rising costs.
FIA says fuel has grown from about 30%-40% to 55%-60% of airlines’ operating expenses.
The association says Brent crude rose from $72 to $118 a barrel, while ATF prices peaked at $260.24 and are now around $175.33 a barrel.
FIA wants domestic ATF pricing shifted from international benchmarks to a cost-plus formula, and seeks a fixed-rate excise duty instead of the 11% levy.
FIA is seeking continuation of 7% ATF VAT in Delhi and Maharashtra, lower VAT in four other states, and continuation of government support measures.
- Who
- The Federation of Indian Airlines, whose members include Air India, IndiGo and SpiceJet.
- What
- FIA is seeking government relief, including a cost-plus ATF pricing model and tax measures.
- When
- FIA sent a letter to the Civil Aviation Ministry late last month; the article was published October 6, 2026.
- Where
- India, with VAT requests concerning Delhi, Maharashtra, Tamil Nadu, West Bengal, Karnataka and Telangana.
- Why
- FIA says higher fuel costs and other operating pressures are straining airline finances and could lead to route cuts.
FIA’s position
Government measures cited
ATF pricing
FIA’s position
FIA wants domestic ATF priced on actual fuel cost plus a reasonable margin, instead of relying on international benchmarks.
Government measures cited
The article reports that the government has used an ATF price cap for a specified period; it does not state the government’s position on FIA’s proposed permanent pricing formula.
Relief measures
FIA’s position
FIA says existing support, including tax relief and lower landing and parking charges, should continue to ease pressure on airlines.
Government measures cited
The article describes time-limited measures already taken by the government, but does not provide a government response to FIA’s request for continuation.
- Fuel share of operating costs
- FIA says it increased from around 30%-40% to about 55%-60%.
- Brent crude
- FIA said it rose from $72 to $118 per barrel after the West Asia conflict began.
- ATF price
- The MOPAG-plus-premium price rose from $87.24 per barrel, peaked at $260.24, and was reported at around $175.33.
- Requested pricing change
- FIA wants domestic ATF priced using actual fuel costs plus a reasonable margin, rather than international benchmark pricing.
- Excise duty
- FIA seeks a fixed-rate duty instead of the current 11% ad valorem excise duty.
- VAT requests
- FIA wants the 7% ATF VAT rate continued in Delhi and Maharashtra and lower rates in Tamil Nadu, West Bengal, Karnataka and Telangana.
- Other measures FIA wants continued
- An ATF price cap of 25% over March 2026 pricing from April 1 to June 8, and a 25% reduction in domestic-flight landing and parking charges for April-July.
