Indian airlines warn of risk of flight suspensions due to rising fuel prices
Kyiv • UNN
The Federation of Indian Airlines states there is a risk of flight cancellations due to high fuel costs. The government has introduced price caps and incentives for the industry.
The Federation of Indian Airlines (representing the interests of carriers such as IndiGo, Air India, and SpiceJet) has warned the government of a possible mass suspension of flights, Bloomberg reports, according to UNN.
Details
In a letter to India's Ministry of Civil Aviation, the industry association stated that the aviation industry is on the brink of closure or a complete shutdown of operations due to the rapid rise in aviation fuel prices.
Air carriers are urging the authorities to reinstate fuel price caps that were in effect during the pandemic, as well as to reduce or defer tax payments.
Meanwhile, Prime Minister Narendra Modi's administration may raise energy prices immediately after the regional elections conclude on April 29. However, while the government has officially denied plans for gasoline price hikes, the issue regarding aviation kerosene remains without a clear answer.
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Carriers state that any unreasonable increase in fuel prices will lead to heavy losses and force airlines to ground their aircraft. Fuel costs account for up to 40% of Indian carriers' operating expenses, making them critically dependent on market fluctuations. An additional burden is the weakening of the Indian rupee, which increases costs for aircraft leasing and maintenance at foreign airports, typically fixed in dollars.
In response to the crisis, the Indian government has already introduced some temporary support measures. Specifically, a 25% limit on monthly aviation fuel price increases was established, and landing and parking fees at the country's airports were reduced for the same period. The possibility of providing airlines with government-guaranteed loans is also being considered to prevent a collapse of the transport system.