Airlines seek urgent ATF support, warn of flight cuts

NEW DELHI: Indian carries have warned govt they will be forced to cut flights on “unviable routes” as aviation turbine fuel prices are now at the highest level in a decade along with continuing challenges like Pakistan airspace closure and the rupee crashing. The Federation of Indian Airlines (FIA), which has Air India, IndiGo and SpiceJet as its members, has urged that ATF price hikes be curbed, as they were earlier this year.“Fuel component historically constituted about 30% to 40% of airline operating costs. (It) has increased to about 55% to 60% under the prevailing circumstances. In addition, airspace restrictions have resulted in longer flight routes, leading to higher fuel consumption, increased crew costs, and lower aircraft utilisation. Airlines are also facing additional pressure from depreciation of the Indian rupee, as key expenses such as fuel, aircraft leases, maintenance, and insurance are US dollar denominated,” says a recent FIA SOS sent to the Union aviation ministry.India is weighing a fresh mechanism to stabilise ATF prices and tweak the system as the last such scheme launched a few months back had got found a single taker. Govt had cleared a one-time budgetary support of Rs 10,000 crore for OMCs to stabilise ATF prices and support domestic airlines some months back but no airline signed up for this.Now, FIA has urged an “urgent support to continue uninterrupted operations and provide air connectivity during these challenging periods.” It has sought ATF pricing on cost plus model; ATF excise duty relief; Key states to reduce VAT on ATF and extend concession on landing and parking charges.“Such measures would provide much-needed support to the aviation sector, help preserve affordable air travel for passengers, and enable airlines to continue contributing to India's economic growth and connectivity objectives despite the challenging operating environment. If timely relief is not available, the airlines may be compelled to withdraw from several unsustainable routes,” FIA letter says.You use AI every day. Now get your AI Quotient. Take the AIQ test.