Whalesbook
Airlines are making this plea amid deep financial strain. India's state-run refiners, including Indian Oil, Hindustan Petroleum, and Bharat Petroleum, are reportedly selling jet fuel for domestic flights at a loss of around ₹92,000 per kiloliter. These companies are considering a jet fuel price increase of up to 25% for June. Major carriers like Air India, IndiGo, and SpiceJet are strongly lobbying for this rise to be delayed.
Government's Past Interventions
India's oil ministry is involved in these talks, mirroring its actions in April and May. The ministry previously capped the latest jet fuel price hike at 25% and asked oil companies to hold prices steady in May, after global oil costs surged. This shows how sensitive India's airline market is to rising expenses.
International vs. Domestic Fuel Prices
These price talks and potential limits only concern fuel for domestic flights. Jet fuel for international routes is deregulated and has seen sharp price jumps, more than doubling in April and reaching $1,511.86 per kiloliter by May.
Broader Industry Pressures
Jet fuel is a major expense, making up about 40% of operating costs for Indian airlines. The industry has warned that flights could be suspended if fuel prices aren't controlled. Airlines also face a weaker rupee, which increases costs for leasing planes and paying for international airport services. They are also pushing for tax cuts or deferrals. Softening demand, partly from higher ticket prices, adds further pressure to the market.