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‘On the Verge of Closing Down’: India’s Aviation Industry Under Strain as Fuel Costs Surge

The Federation of Indian Airlines says jet fuel costs have made operations unviable and urges tax relief as Brent crude jumps to $118 a barrel.

  • The Federation of Indian Airlines , representing IndiGo, SpiceJet, and Air India, warned the Ministry of Civil Aviation that the industry faces potential shutdowns due to unrelenting cost pressures.
  • Disruptions to the Strait of Hormuz via the West Asia War blockaded a chokepoint carrying roughly 20% of global oil, driving Brent Crude prices from $72 to $118 per barrel and surging Aviation Turbine Fuel costs.
  • Aviation fuel expenses have ballooned to 55-60% of airline operating costs, while jet fuel costs skyrocketed by about 0.60 per litre; a weakening rupee compounded the financial burden for Indian carriers.
  • To avert disaster, the FIA urged the government to restore refinery margins under a "crack band" formula, suspend the 11% excise duty on ATF, and cut VAT rates in Delhi and Tamil Nadu.
  • Major hubs including Mumbai, Bangalore, Hyderabad, and Kolkata account for over half of India's operations yet face VAT between 16% and 20%, complicating efforts for Indian airlines to compete globally.
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cargoinsights.co broke the news on Tuesday, April 28, 2026.
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