- Indian airlines are monitoring rising aviation turbine fuel (ATF) prices ahead of May revision
- Carriers may cut flights on less profitable routes if jet fuel prices increase sharply
- Short-haul flights and routes with low passenger occupancy could face significant frequency cuts
Indian airlines are currently in a wait-and-watch mode as they assess the impact of rising aviation turbine fuel (ATF) prices and prepare for potential changes following the next price revision scheduled for May, sources said.
According to industry sources, airlines are likely to take a call on cutting flights after the May ATF revision. A sharp hike in jet fuel prices could force carriers to rationalise capacity, particularly on routes that are less profitable or have low load factors.
Sources indicated that airlines may reduce frequencies on low-yield routes, with short-haul flights expected to face the most significant cuts if fuel costs rise substantially. Routes with consistently low passenger occupancy are also likely to see reductions.
Airlines are preparing for multiple scenarios, including possible changes to the government-imposed cap on ATF price increases. In the event that the current 25% cap on ATF price hikes is removed, domestic flight cancellations could rise sharply, sources warned.
At the same time, the government has taken steps to cushion the impact of the West Asia crisis on the aviation sector. As part of its relief measures, the government has reduced parking and landing charges by 25% at major airports. Additionally, it has capped the hike in ATF prices at 25% for the month of April to help airlines manage costs.
Despite these measures, airlines remain cautious and continue to monitor fuel price movements closely before making any network or capacity adjustments.
Over 85% of India's fuel needs are currently fulfilled through oil imports. This makes the country vulnerable to geopolitical headwinds, as seen in the recent cooking gas crunch reported in parts of the country following the West Asia crisis.
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