India's aviation industry has been alarmed by the Middle East situation, with numerous airlines expressing worries that they may be "stopping operations" because of the high cost of gasoline. The government has been asked to change the price of aviation turbine fuel (ATF), which adds over 40% to an airline's operating costs, by at least three carriers, including the Tata-owned Air India.
In a letter to the Civil Aviation Ministry, the Federation of Indian Airlines (FIA) stated, "... Any ad hoc pricing (domestic vs. international) and/or irrational increase in the price of ATF will result in insurmountable losses for airlines and will lead to grounding of aircraft, resulting in cancellation of flights."
Air India, IndiGo, and SpiceJet are represented by the FIA.In the letter dated April 26, it stated, "We urgently request your intervention for immediate and meaningful financial support to tide over the current situation in order to survive, sustain, and continue operation."
According to the federation, long-haul flights are the most impacted. In order to alleviate the situation, they requested that the ministry employ a unified fuel pricing strategy for both domestic and international operations, similar to what was previously done with a "crack band."The term "crack band" describes an ATF pricing system that prevents significant disparities between the price of refined ATF and crude oil.
The price increase for ATF was restricted by the government to Rs 15 per litre for domestic operations and Rs 73 per litre for overseas activities.
The airlines have also requested a temporary postponement of the 11% excise tax on ATF.The federation stated that the 11% excise duty has a significant impact on airlines due to the extraordinary increase in ATF costs from the pre-crisis period and the weakening of the currency.
Oil and gas are transported by tankers from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates, and Iran across the strait, which is bordered to the north by Iran. Asia receives the majority of that oil. The oil commerce is severely disrupted by any interference with movement across the strait.