Air India, IndiGo, SpiceJet seek ATF price relief; say airline industry on verge of ‘stopping operations’
The Federation of Indian Airlines, representing Air India, IndiGo, and SpiceJet, has warned that the airline industry is under extreme stress and nearing operational shutdown due to soaring aviation turbine fuel (ATF) prices. The FIA has requested immediate relief through a revised pricing mechanism, excise duty cuts, and lower VAT rates. International flights have become financially unviable, contributing to significant losses for carriers.
- ▪The Federation of Indian Airlines represents Air India, IndiGo, and SpiceJet and has warned of potential shutdowns due to high fuel costs.
- ▪The FIA has proposed a 'crack band' pricing mechanism to control ATF prices, similar to one used during the COVID-19 pandemic.
- ▪ATF prices are driven by a surge in crack spread from $11–18 per barrel to over $130, even as crude oil prices rose from $72 to $118 per barrel.
- ▪International flights saw nearly a 100% increase in ATF prices, making operations impractical and leading to major losses.
- ▪Delhi charges 25% VAT on ATF, second only to Tamil Nadu’s 29%, with major aviation hubs charging between 16% and 20% VAT.
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The Federation of Indian Airlines (FIA), which represents Air India, IndiGo and SpiceJet, has warned that the sector is under “extreme stress”, with some airlines on the “verge of shutting down”, and has sought urgent relief on fuel pricing ahead of the next monthly revision on May 1.The industry body has proposed a “crack band” pricing mechanism similar to the one introduced during COVID-19, under which oil marketing companies (OMCs) would still recover higher crude costs along with reasonable refining margins.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at The Hindu.
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