New Delhi: India’s leading carriers have cautioned that the aviation sector is under severe financial strain and could be forced to halt operations if urgent relief is not provided. In a letter to the government, the Federation of Indian Airlines (FIA)—representing Air India, IndiGo and SpiceJet—has called for immediate revisions in Aviation Turbine Fuel (ATF) pricing and a temporary suspension of excise duty on jet fuel for domestic flights.

The FIA described the industry’s condition as “extremely stressed,” warning that soaring fuel costs, compounded by the ongoing West Asia crisis and related airspace closures, have sharply increased operational expenses and disrupted airline networks.

At the heart of the issue is what the body termed “ad hoc” ATF pricing, which it says has created a severe imbalance between domestic and international operations. According to the letter, this pricing structure is making routes commercially unviable and pushing airlines toward unsustainable losses.

“The aviation sector in India is on the brink of shutting down or suspending operations,” the FIA stated, highlighting that escalating ATF prices have worsened an already fragile financial situation.

The industry body also flagged recent pricing changes, noting that while the government capped the increase in ATF prices for domestic operations at ₹15 per litre, rates for international operations surged by ₹73 per litre. This disparity, it said, has rendered both segments financially untenable.

Warning of “insurmountable losses,” the FIA said continued price volatility could lead to grounded aircraft and widespread flight cancellations. It urged the government to provide immediate financial support to help airlines sustain operations during the crisis.

Additionally, the FIA has sought a temporary waiver of the 11% excise duty on ATF, arguing that rising global fuel prices and rupee depreciation have significantly inflated costs. It also called for a reduction in state-level VAT, particularly in major aviation hubs like Delhi, where taxes remain among the highest in the country.

With more than half of India’s airline operations concentrated in six key cities, the body stressed that rationalizing fuel taxation is critical to stabilizing the sector and preventing further disruption.