Indian airlines warn of collapse as fuel prices soar amid Pakistan airspace ban
New Delhi : Indian carriers Air India, IndiGo, and SpiceJet have warned the Modi government that the aviation industry is on the brink of a “complete shutdown” due to soaring jet fuel prices triggered by the Iran war and ongoing closure of Pakistani airspace.
According to Kashmir Media Service, the Federation of Indian Airlines, in an April 26 letter to the Civil Aviation Ministry, said ATF costs — now 40% of operating expenses — have made both domestic and international flights “completely unviable” after prices jumped to $179 per barrel amid disruptions in the Strait of Hormuz.
Airlines sought urgent deferment of 11% excise duty on ATF and a uniform pricing mechanism, warning that “irrational” hikes will cause “unsurmountable losses,” aircraft groundings, and mass flight cancellations.
Indian airlines are already reeling from Pakistan’s airspace ban since April 2025, which has hit 800 weekly flights. Air India alone faces a $600 million yearly loss due to the ban, Indian media reported.
The Iran war, ongoing since February 28, has closed the Strait of Hormuz, choking 11 million barrels of oil per day from the market, according to the International Energy Agency.
