'Airspace restrictions have resulted in...': Airlines seek 25% landing parking charge relief for airlines amid West Asia conflict

The Federation of Indian Airlines (FIA), which represents Air India, IndiGo and SpiceJet, has written to Civil Aviation Minister Kinjarapu Rammohan Naidu seeking urgent support for domestic carriers facing rising costs linked to the continuing West Asia conflict since April 2026. In its letter dated 25 September 2026, the industry body said airlines were under “severe financial pressure” because of 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, saying the earlier relief granted under an AERA order expired on 7 July 2026. The body said airlines were continuing to maintain “connectivity and uninterrupted services”, but sustained cost increases were hurting finances as fares could not be raised immediately because tickets were often sold well in advance.

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The FIA said fuel, which had historically accounted for around 30-40% of airline operating costs, had risen to about 55-60% under current conditions. It said longer routings caused by airspace restrictions had increased fuel burn, crew costs and reduced aircraft utilisation.

"In addition, airspace restrictions have resulted in longer flight routes, leading to higher fuel consumption, increased crew costs, and lower aircraft utilization. Airlines are also facing additional pressure from the depreciation of the Indian Rupee, as key expenses such as fuel, aircraft leases, maintenance, and insurance are largely linked to the US Dollar," it said.

The body asked the government to shift ATF pricing for domestic operations to a “cost-plus model” instead of an international benchmark. It said Brent crude had risen from $72 per barrel to $118 per barrel, while ATF prices had moved from $87.24 per barrel to a peak of $260.24 per barrel and were currently at $175.33 per barrel. It also flagged the rise in the crack spread to around $60-61 per barrel against an average of $8-12.

The FIA further sought rationalisation of the 11% excise duty on ATF by moving from an ad valorem levy to a fixed-rate structure, arguing that higher fuel prices were also pushing up excise and VAT. It asked for VAT relief of 7% in Delhi and Maharashtra to be continued beyond mid-November 2026, and urged similar cuts in Tamil Nadu, West Bengal, Karnataka and Telangana.

The FIA said “timely support” was needed to protect airline finances, sustain connectivity and avoid a situation in which carriers may be forced to withdraw from several “unsustainable routes”.