Airline industry warns of shutdown risk as jet fuel costs surge to 60% of operating expenses

India’s airline industry has warned the government that it is on the verge of a breakdown, with soaring aviation turbine fuel (ATF) prices threatening to make operations unviable, according to a letter sent by the Federation of Indian Airlines (FIA) to the Ministry of Civil Aviation on April 26, The Economic Times reported.

The letter, addressed to Civil Aviation Secretary Samir Kumar Sinha, was written on behalf of FIA members Air India, IndiGo, and SpiceJet. The federation said carriers were under extreme stress and on the verge of shutting down or halting operations due to a sharp spike in ATF prices driven by geopolitical tensions.

The FIA said ATF prices for international operations had surged by Rs 73 per litre, far exceeding the Rs 15 per litre increase applied to domestic flights. The federation said the April 2026 pricing outcomes failed to ensure parity between domestic and international operations, adding that both segments had become completely unviable.

Fuel costs, which previously accounted for 30 to 40 per cent of airline operating expenses, have risen to between 55 and 60 per cent following the sharp jump in crude-linked benchmarks, the FIA said.

The letter signals mounting pressure on Indian carriers at a time when the broader aviation sector is contending with elevated energy costs linked to ongoing global geopolitical uncertainty. The industry has sought government intervention to address the pricing disparity and prevent further financial deterioration.