New Delhi: The Union Cabinet on Wednesday approved a one-time budgetary support package of ₹10,000 crore for oil marketing companies (OMCs) to help stabilise aviation turbine fuel (ATF) prices for Indian airlines grappling with rising operational costs due to the West Asia conflict and continuing airspace restrictions.
Announcing the decision, Information and Broadcasting Minister Ashwini Vaishnaw said the financial assistance aims to cushion airlines from the sharp increase in ATF prices triggered by geopolitical tensions in West Asia and the closure of Pakistani airspace for Indian carriers.
Under the approved package, the government will provide ₹10,000 crore as interest-free support to OMCs to facilitate ATF price stabilisation for both domestic and international flight operations. The measure is expected to reduce fuel cost pressures on airlines and help maintain operational viability amid volatile global energy markets.
Fuel is one of the largest components of airline operating expenses, and the recent surge in crude oil prices has significantly increased the cost of aviation turbine fuel. Industry stakeholders have repeatedly expressed concerns that prolonged geopolitical instability could impact fares, profitability and overall air connectivity.
The government’s intervention is aimed at ensuring that airlines continue to operate smoothly without passing the entire burden of higher fuel costs on to passengers. The move is also expected to provide temporary relief to carriers facing longer flight routes and increased fuel consumption because of restricted access to Pakistani airspace.
The decision comes as aviation companies navigate a challenging environment marked by geopolitical uncertainty, fluctuating energy prices and rising operational expenses.
