The Federation of Indian Airlines (FIA) – representing Air India, IndiGo and SpiceJet – has written to the Ministry of Civil Aviation requesting urgent fiscal support as the escalating West Asia conflict inflates operating costs and disrupts flight paths. A letter shared with media on 6 October warns that carriers may have to cut capacity unless the government intervenes. Airspace closures over parts of Iran, Iraq and Israel have forced detours of up to 90 minutes on Europe-India sectors, pushing aviation turbine fuel (ATF) consumption higher just as Brent crude hovers near US$118 a barrel. FIA says fuel now accounts for 55-60 % of total airline costs, up from 40 % pre-crisis, while a weakening rupee magnifies dollar-denominated lease, maintenance and insurance expenses. The association wants domestic ATF pricing shifted from an international benchmark formula to a cost-plus model and seeks a temporary waiver of excise duty and airport charges. It also proposes a working-capital support scheme to help carriers through the winter travel peak when forward tickets were sold before the latest fuel spike and cannot be repriced retroactively. For global mobility managers, the fallout is already visible: fare surcharges announced by IndiGo and Vistara effective 7 October, longer block times on Europe-India returns, and thinner spare-aircraft coverage increasing the risk of knock-on delays. Companies with large assignee populations in the Gulf or Europe should budget for higher average ticket prices and consider flexible travel-waiver clauses in vendor agreements. Policy experts note that any tax relief will need coordination with state governments, which levy VAT on ATF ranging from 1 % in Nagaland to 30 % in Maharashtra. A decision is expected before Diwali to give airlines pricing certainty for the holiday surge.
Source: Moneycontrol
