Domestic airlines request oil majors to hold off on jet fuel hike

Indian airlines including Air India, IndiGo and SpiceJet have urged state-run oil refiners to defer domestic jet fuel price hikes as rising ATF costs and geopolitical tensions deepen financial stress on carriers.

Written by Nitin Kumar

May 19, 2026 21:50 IST

With aviation turbine fuel accounting for nearly 40% of operating costs, airlines have warned of possible flight disruptions and sought tax relief amid soaring crude prices and restricted international airspace access.

Amid rising costs and mounting losses, domestic airlines, including Air India, IndiGo and SpiceJet, have asked state-run oil refiners to defer aviation turbine fuel (ATF) price hikes for domestic flights until the Middle East conflict eases.

This move comes as the state-owned refiners — IOCL, HPCL and BPCL — are weighing a June hike of up to 25% on domestic ATF. They currently supply jet fuel at around ₹1,05,000 ($1,090) per kilolitre, incurring a loss of ₹92,000 per kilolitre.

The price controls are only for domestic routes. ATF for international flights, which is unregulated, doubled in April and rose further to $1,511.86 per kilolitre in May.

With fuel comprising 40% of airline costs, carriers have warned of flight suspensions and other disruptions if prices aren’t capped. Airlines are also seeking tax relief and have trimmed schedules amid softening demand in the world’s third-largest domestic aviation market.

Relief measures rolled out by the government

Since the Iran conflict began, the government has rolled out relief measures, including rebates on landing and parking charges, regulated ATF increases, and tax cuts on fuel at Delhi and Mumbai airports.

International operations have also taken a hit, with Indian carriers losing access to Iranian airspace — a key corridor to Europe and North America — following Pakistan’s earlier ban on Indian flights. Higher costs have been passed on to passengers through increased fares, dampening demand further.

Prices of aviation turbine fuel are usually revised by oil marketing companies on the first day of every month. Over the last two months, oil marketing companies have increased jet fuel prices.

In May, a 5% hike was implemented, but domestic flights were shielded from the increase.

Domestic airline companies had earlier warned that rising fuel costs were making operations on several routes unviable.

Airline operators had earlier written to the government seeking a temporary suspension of the 11%excise duty on ATF for domestic operations.

This article was first uploaded on May nineteen, twenty twenty-six, at fifty minutes past nine in the night.