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India approves $1 billion fund to help airlines weather fuel cost surge

On Wednesday, the Union Cabinet approved Rs 10,000 crore in budgetary support to state-run oil-marketing companies to stabilize aviation turbine fuel prices for scheduled Indian airlines operating domestically and internationally.
The West Asia conflict pushed international ATF prices up 135% from Rs 60.5 per litre in March to Rs 142 per litre in May, with fuel costs now accounting for up to 60% of airline operating expenditure.
Rising fuel costs forced Air India, Air India Express, and Indigo to collectively cut 250 daily domestic flights from June, while the Union Petroleum Ministry reported OMCs were incurring under-recoveries of Rs 30 per litre on domestic jet fuel.
Under the new arrangement, airlines must procure ATF exclusively from OMCs for up to three years, "subject to annual review or until the advance amount is fully recovered, whichever is earlier," with prices capped at Rs 75.6 per litre.
Union Petroleum Minister Hardeep Singh Puri stated the fund safeguards 77 lakh jobs and maintains air connectivity to Europe, North America, and Central Asia, with the government planning to recover advances once international fuel prices moderate.

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India approves $1 bn fund for airlines as fuel costs surge

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