The Federation of Indian Airlines (FIA) has warned the government of potential flight cancellations due to the surge in aviation turbine fuel (ATF) prices.
The FIA, representing Air India, IndiGo, and SpiceJet, said the current ad hoc pricing structure is creating a severe imbalance in operations and making airline networks unviable and unsustainable.
The association has requested the government to return to the crack band mechanism, defer excise duty on ATF, and reduce value-added tax on ATF in key states.
The West Asia conflict has pushed Brent crude prices from $72 per barrel to $118 per barrel, resulting in a 295% increase in ATF prices.
Airlines account for 30-40% of their costs in ATF, and the price surge has pushed fuel's share of operating costs to 55-60%, making operations unviable.
