India’s aviation sector is under severe financial strain, with major airlines warning that rising fuel prices could force them to scale back operations or even suspend flights if urgent relief is not provided.
Air India, IndiGo, and SpiceJet – represented by the Federation of Indian Airlines (FIA) – have issued an urgent appeal to the government of India, stating that the combination of soaring aviation turbine fuel (ATF) prices and war-driven airspace restrictions has pushed the industry to a critical breaking point.
“The airline industry in India is under extreme stress and is on the verge of closing down or of stopping its operations,” the letter stated.
“The dire condition of the Aviation Sector has been exacerbated by the West Asia war and the exorbitant increase in the price of ATF.
“This has been compounded by longer flight routes due to restricted airspace,” the letter added.
Industry representatives said the situation has made many routes financially unviable.
“The ATF pricing for international operations was increased by Rs73 per litre, making practically international operations along with domestic operations completely unviable and resulting in significant losses for the aviation sector in April 2026,” FIA said.
“The April’26 pricing outcomes do not ensure parity between domestic and international operations,” the airline body added.
Jet fuel prices have surged sharply due to the conflict in the Middle East, leading airlines across the world to cancel flights and add extra charges to manage rising costs.
The FIA has requested immediate intervention, including the temporary suspension of excise duty on jet fuel, reduction in state-level taxes such as VAT, and a review of the pricing structure for aviation fuel.
Fuel's Gold: Indian Aviation Cry For Relief Amid Operation Stoppage Warning
— RT_India (@RT_India_news) April 29, 2026
India's three major carriers, Air India, IndiGo and SpiceJet, have warned of an impending operational crisis, citing "extreme stress" from surging fuel prices.
In a letter dated 26 April, the FIA… pic.twitter.com/4XK63CxEJW
The airline body called for a reduction in value-added tax (VAT) on jet fuel in key states, particularly Delhi and Tamil Nadu. They pointed out that major aviation hubs such as Mumbai, Bengaluru, Hyderabad, and Kolkata already face VAT rates between 16 per cent and 20 per cent, which collectively impact more than half of India’s air traffic and further increase operating expenses.
Airlines also pointed to currency depreciation as an additional burden, which has further inflated fuel expenses in rupee terms.
The federation has cautioned that without swift government action, India’s aviation network could face severe disruption, with both domestic and international connectivity at risk.
FIA is also seeking a temporary suspension of the 11 per cent excise duty currently applied to aviation turbine fuel for domestic operations.
According to the industry, this tax is adding significant pressure to already rising fuel costs.
The Independent has reached out to the Indian ministry of civil aviation for comments.
Last week, United Airlines and Lufthansa were among the latest carriers considering fare hikes and flight cancellations as jet fuel prices spiked.
United’s CEO has said ticket prices could rise by up to 20 per cent, while Lufthansa announced plans to cancel around 20,000 flights in an effort to offset surging fuel costs.
