The Federation of Indian Airlines, whose members include Air India, IndiGo and SpiceJet, has written to Civil Aviation Minister Kinjarapu Ram Mohan Naidu seeking urgent government intervention over what it describes as an "unprecedented" financial impact from the West Asia crisis.
The federation has asked the government to price aviation turbine fuel for domestic operations on a cost-plus basis rather than against the international benchmark.
It has also sought rationalisation of excise duty on ATF and of airport charges, according to a copy of the letter seen by NDTV Profit.
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On state levies, the FIA has requested that value added tax relief on ATF offered by Delhi and Mumbai be continued. It has also asked for similar relief in West Bengal, Tamil Nadu, Karnataka and Telangana.
The appeal comes as carriers absorb steep fuel costs.
"FIA sincerely appreciates the Government's initial interventions, including measures relating to ATF price cap of 25% over March 2026 pricing from Apri 01, 2026 to June 08, 2026, reduction of VAT on ATF in Delhi and Maharashtra to 7% (for six months), and the direction for a 25% reduction in landing and parking charges for domestic flights for the period April'26 to July'26. Given that the underlying geopolitical and fuel-price pressures continue, it is critical that these measures are continued and strengthened to prevent further deterioration in the financial position and operational resilience of Indian carriers," FIA said in a letter.
The federation further stated that airspace restrictions have resulted in longer flight routes, leading to higher fuel consumption, increased crew costs, and lower aircraft utilization.
"Airlines are also facing additional pressure from the depreciation of the Indian Rupee, as key expenses such as fuel, aircraft leases, maintenance, and insurance are largely linked to the US Dollar. Despite these challenges, airlines have continued to maintain connectivity and provide uninterrupted hassle-free services to passengers in the interest of Public at large. However, the sustained increase in costs is placing significant pressure on airline finances."
Domestic jet fuel prices reportedly rose by Rs 16 per litre from October 1, taking them to around Rs 137 per litre. Oil markets have been under pressure from the war involving Iran.
Brent crude crossed $100 a barrel for the first time since July, and that the conflict has sharply slowed Gulf oil flows through the Strait of Hormuz, which carried about 20% of the world's petroleum before the war.
The FIA's earlier appeal to the ministry, dated April 26, put fuel at 55% to 60% of operating costs.
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