ISTANBUL, April 29 – The Federation of Indian Airlines, representing Air India, IndiGo and SpiceJet, warned the government that the aviation industry is on the verge of “stopping operations” due to rising costs linked to tensions in West Asia and disruptions near the Strait of Hormuz, Anadolu Ajansi reported, citing Press Trust of India on Tuesday.
The airlines sought a temporary deferment of the 11 per cent excise duty on Aviation Turbine Fuel (ATF), as well as a uniform fuel pricing mechanism for domestic and international operations.
ATF accounts for about 40 per cent of airlines’ operating costs. Last month, the government capped the ATF price increase at 15 Indian rupees (US$0.16) per litre for domestic flights, while international prices rose by 73 Indian rupees (US$0.77) per litre.
“…any ad hoc pricing (domestic vs international) and/or irrational increase in the price of ATF will result in insurmountable losses for airlines and will lead to the grounding of aircraft, resulting in the cancellation of flights,” the federation said in a letter dated April 26 to the Civil Aviation Ministry.
“In order to survive, sustain and continue operations, we request your urgent intervention for immediate and meaningful financial support to tide over the current situation,” it said.
The airlines said the situation has made both international and domestic operations largely unviable, resulting in significant losses for the aviation sector in April.
The Strait of Hormuz is one of the world’s most critical energy chokepoints, with roughly one-fifth of global oil supply passing through it daily.
The waterway has faced disruptions since early March following the outbreak of war on Feb 28, when the United States and Israel launched a joint offensive on Iran. The conflict is currently on hold under a ceasefire, while diplomatic efforts are ongoing to reach a lasting agreement.
