Airlines across India have welcomed the Centre’s decision, describing it as a timely and critical intervention at a moment when surging fuel prices have significantly strained the aviation sector. The move comes after a steep rise in ATF prices, which have nearly increased 2.5 times, rising from Rs 60.5 per litre in March 2026 to Rs 142 per litre in May 2026 due to the Middle East conflict, as noted by Union Minister Ashwini Vaishnaw.
In response to the volatility, the Centre has capped ATF prices for domestic operations at Rs 75.6 per litre. Aviation fuel accounts for approximately 40 per cent of airline operating costs, and the recent spike has placed considerable financial pressure on both carriers and oil marketing companies.
The government has approved a one-time budgetary support of up to Rs 10,000 crore, to be extended as an interest-free advance to oil marketing companies to enable ATF price stabilisation for scheduled Indian airlines. According to the Cabinet note, the arrangement will compensate oil marketing companies for losses arising when the import parity price exceeds the benchmark price determined under the approved mechanism.
The stabilisation framework will remain in effect for up to 36 months, subject to annual review or until the entire allocated amount is recovered, whichever occurs earlier. Once global fuel prices ease, the differential amount will be recovered from oil marketing companies and returned to the Consolidated Fund of India.
Major Indian carriers, including Air India, IndiGo, SpiceJet, and Akasa Air, have publicly welcomed the announcement.
Air India stated: “Air India warmly welcomes and deeply appreciates the Government of India's decision to introduce Aviation Turbine Fuel (ATF) price stabilisation support. We are grateful to the Ministry of Civil Aviation, the Ministry of Petroleum and Natural Gas, and all concerned authorities for this timely intervention. This progressive measure provides much-needed support to the Indian aviation ecosystem and reinforces the Government's commitment to strengthening connectivity for the people of India, while enabling airlines to serve passengers more effectively.”
IndiGo also expressed gratitude, stating: “We are grateful to the Government of India, Ministry of Civil Aviation, Ministry of Petroleum and Natural Gas and the concerned authorities for announcing Aviation Turbine Fuel (ATF) price stabilisation support to Scheduled Indian Airlines. This timely intervention is a welcome relief that reflects the Government's understanding of the critical role aviation plays in connecting people and enabling economic growth, while also fostering an environment that empowers airlines to serve passengers better and contribute towards India's journey as a global aviation hub.”
SpiceJet said the measure would enhance stability amid global uncertainty, stating: “SpiceJet welcomes the Government of India's decision to approve a Price Stabilisation Fund for ATF pricing support during the current period of exceptional fuel price volatility. This measure will help provide greater predictability and stability at a time when the aviation industry continues to grapple with geopolitical uncertainties and elevated fuel costs. We are grateful to the Government of India, the Ministry of Civil Aviation, the Ministry of Petroleum & Natural Gas and all stakeholders involved for their support and for recognising the challenges posed by the ongoing volatility in fuel prices. This is another important step by the Government and follows a series of timely interventions that have helped the aviation sector navigate one of the most challenging global operating environments in recent years.”
Akasa Air added that the initiative would strengthen connectivity and economic growth, stating: “We are deeply grateful for the continued support of the Government of India. The ATF price stabilisation support will ensure stability of airline operations amid global volatility, while supporting the sector's continued contribution to connectivity, economic growth, and nation building.”
The announcement is expected to provide short-term financial relief to airlines while ensuring predictable fuel pricing during a period of heightened global energy uncertainty.
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