Airlines React To Rs 10,000 Crore Fund Approval Amid Rising Jet Fuel Costs

Airlines across India have welcomed the Centre's decision to introduce aviation turbine fuel (ATF) price stabilisation support, calling it a timely intervention amid a steep surge in fuel costs. The move follows a sharp escalation in ATF prices driven by the ongoing West Asia crisis, which has significantly strained airline operations in recent months. With fuel accounting for a substantial share of operating expenses, carriers say the government's step will help bring much-needed stability and predictability to the sector.

The Centre approved the fund on Wednesday, with Union Minister Ashwini Vaishnaw noting that aviation turbine fuel prices have risen nearly 2.5 times - from Rs 60.5 per litre in March 2026 to Rs 142 per litre in May 2026 - owing to the Middle East conflict.

To provide relief, the Centre has capped ATF prices for domestic operations at Rs 75.6 per litre. The move is expected to offer significant support to airlines, for whom fuel accounts for roughly 40 per cent of operating costs. The recent spike has placed considerable strain not only on carriers but also on oil marketing companies (OMCs).

Major Indian airlines, including Air India, IndiGo, SpiceJet and Akasa Air, have welcomed the announcement, expressing gratitude to the government for providing the much-needed support to the Indian aviation ecosystem.

Taking to their official X handle, Air India wrote, "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."

The airline added, "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."

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… https://t.co/6pHFoC7D54

— Air India Newsroom (@AirIndia_News) June 3, 2026

IndiGo also expressed its gratitude for the Aviation Turbine Fuel (ATF) price stabilisation support. On X, IndiGo said, "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."

The post added, "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."

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… https://t.co/PLoM1UejLY

— IndiGo (@IndiGo6E) June 3, 2026

SpiceJet said this measure will help provide greater stability at a time when the aviation industry continues to grapple with geopolitical uncertainties and elevated fuel costs. The airline wrote on X, "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."

SpiceJet welcomes the Government of India's decision to approve a Price Stabilization 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…

— SpiceJet (@flyspicejet) June 4, 2026

Akasa Air added that the support will contribute to connectivity, economic growth, and nation building. "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."

We are deeply grateful for the continued support of the Government of India. The ATF price stabilization support will ensure stability of airline operations amid global volatility, while supporting the sector's continued contribution to connectivity, economic growth, and nation… https://t.co/kn6a8WRXV3

— Akasa Air (@AkasaAir) June 4, 2026

How Exactly Does The Aviation Fuel Price Stabilisation Fund Work?

"A one-time budgetary support of up to Rs 10,000 crore shall be provided as an interest-free advance to OMCs to support ATF price stabilisation for Scheduled Indian Airlines. The corpus shall compensate OMCs for losses arising from elevated international ATF prices whenever the prevailing Import Parity Price exceeds the benchmark price determined under the approved mechanism," according to the Cabinet note.

The stabilisation support will remain in force for up to 36 months, subject to annual review or until the entire amount is recovered, whichever comes earlier.

When global fuel prices ease, the differential amount will be recovered from OMCs and returned to the Consolidated Fund of India.

The initiative specifically aims to maintain predictable ATF pricing for airlines during a period marked by exceptional volatility.