The Federation of Indian Airlines (FIA) has sought a review of the current aviation turbine fuel (ATF) pricing formula. The association said the price of local ATF should be fixed based on actual cost and fair margin rather than international standard pricing. The FIA said geopolitical tensions and rupee depreciation have led to an unprecedented increase in fuel costs, which is putting severe pressure on airline companies’ cash flows. If we look at the statistics, the price of ATF has increased by 25 percent in the last three months.
Costs increased
In a letter to the civil aviation ministry late last month, the FIA also said that if relief is not provided in time, airlines may be forced to withdraw services from several non-viable routes. Air India, IndiGo and SpiceJet are members of FIA. The organization said that in the current scenario, the operating cost of airline companies has increased from around 30-40 percent to around 55-60 percent, of which ATF is the biggest expense. The current conflict in West Asia has taken Brent crude from $72 per barrel to $118 per barrel. Due to this, the price of ATF rose from $87.24 to a high of $260.24 per barrel (an increase of 295 percent) and currently stands at $175.33 per barrel, much higher than in March 2025.
What did you request the government?
The FIA urged the government to review the pricing mechanism being adopted for ATF and reduce the abnormal margin of $60 per barrel against an average of $10-12 per barrel. This can be achieved by adopting a cost and reasonable profit pricing model instead of international benchmark pricing, the organization said. Let us tell you that the price of jet fuel increased by more than 13 percent in the month of October. Jet fuel prices increased for the third consecutive month in October. During this period, the price of jet fuel has increased by 25 percent.
