Indian Airlines Body FIA Urges Government for 25% Landing Fee Relief and ATF Support Amid West Asia Conflict
Why It MattersSustained airspace disruption and fuel-price volatility are pushing Indian carriers to seek structural relief on fuel pricing and levies, with route withdrawals possible if support lapses.
The Federation of Indian Airlines (FIA), representing Air India, IndiGo and SpiceJet, wrote to Civil Aviation Minister Kinjarapu Rammohan Naidu on 25 September 2026, seeking urgent government relief for domestic carriers facing mounting costs linked to the ongoing West Asia conflict, which has disrupted airspace since April 2026. The FIA described airlines as under "severe financial pressure" from airspace restrictions, flight diversions, rupee depreciation, higher operating costs and a sharp rise in aviation turbine fuel (ATF) prices.
Among its requests, the FIA asked the government to extend the 25% reduction in landing and parking charges for domestic flights, noting that the earlier relief granted under an Airports Economic Regulatory Authority of India order had expired on 7 July 2026. On fuel costs, the FIA said ATF, which historically accounted for 30–40% of airline operating costs, had risen to represent approximately 55–60% of costs. It reported that Brent crude had climbed from $72 to $118 per barrel, while ATF prices had surged from $87.24 per barrel to a peak of $175.33 per barrel at the time of writing, with the crack spread rising to around $60–61 per barrel against a historical average of $8–12.
The FIA asked the government to shift ATF pricing for domestic operations from an international benchmark to a "cost-plus model", and to rationalise the 11% excise duty on ATF by moving from an ad valorem levy to a fixed-rate structure. It also requested that VAT relief of 7% in Delhi and Maharashtra be extended beyond mid-November 2026, and urged similar reductions in Tamil Nadu, West Bengal, Karnataka and Telangana.
The FIA warned that longer flight routings forced by airspace restrictions had increased fuel burn, crew costs and reduced aircraft utilisation, while rupee depreciation was adding further strain since fuel, aircraft leases, maintenance and insurance are largely dollar-denominated. The body cautioned that without timely government support, airlines could be forced to withdraw from several routes deemed financially unsustainable.
