Aviation Minister Naidu hails partial ATF price hike; airlines react

Civil Aviation Minister K Rammohan Naidu on Wednesday hailed public sector oil marketing companies' decision to implement a partial and staggered increase in jet fuel prices for domestic airlines, saying it will help in shielding passengers from sharp fare hikes.

Aviation Turbine Fuel (ATF) accounts for around 40 per cent of an airline's operational costs. In order to protect domestic air travel from a sharp global fuel shock, the government has limited the increase in Aviation Turbine Fuel (ATF) prices for domestic airlines to 25%, even as international benchmarks indicated a potential surge of over 100%.

"With ATF prices in India—deregulated since 2001 and revised monthly based on international benchmarks, facing extraordinary pressure due to global energy disruptions and the closure of the Strait of Hormuz, a steep increase of over 100% was anticipated from 1 April," he said in a post on X.


Also read: Jet fuel prices up 8.5%, not 115%, domestic airlines shielded, IOC clarifies

"In this challenging context, the decision by PSU Oil Marketing Companies, under the Ministry of Petroleum in consultation with the Ministry of Civil Aviation, to implement only a partial and staggered increase of 25 per cent (Rs 15/litre) for domestic airlines is both pragmatic and forward-looking, while ensuring that foreign routes bear the full market-aligned price," he said.

The government clarified that international flight operations will not receive similar relief. "Foreign routes will pay for the full increase in ATF prices consistent with what they pay in other parts of the world," an official statement said.

According to Naidu, this measure will help shield passengers from sharp fare increases, ease the burden on domestic airlines, and support the continued stability of the aviation sector at this crucial juncture.

Domestic airlines are grappling with higher operational costs due to the West Asia conflict, as flight operations remain disrupted across the Middle East region. Indian carriers are burning more fuel for operating many international flights as they are forced to take longer routes due to airspace curbs in the West Asia region.

Also read: Government intervenes to soften ATF shock, allows only partial pass-through to airlines

Domestic airlines respond to ATF price hike

India's largest airline IndiGo conveyed gratitude to Prime Minister Narendra Modi, the Ministry of Civil Aviation and the Ministry of Petroleum and Natural Gas for "enabling greater stability for airlines and enabling greater stability for airlines and allowing us to pass on the benefits through more accessible and affordable travel for our customers."

SpiceJet Chairman and MD Ajay Singh hailed government's decision to allow only a partial increase in ATF prices. The move, he said, comes as a significant relief for the Indian aviation industry at a time of unprecedented global uncertainty.

He noted that this timely intervention will go a long way in helping airlines navigate one of the most challenging global crises in recent times, marked by severe external disruptions and volatility in fuel markets.