India cuts aviation turbine fuel price but airline losses projected to rise

The Indian government reduced the domestic price of aviation turbine fuel (ATF) by Rs 5 per litre, setting it at Rs 110 per litre, and revised export duties on petrol, diesel and ATF to Rs 4, Rs 8.5 and Rs 7.5 per litre respectively. Export duty exemptions were expanded to include Mauritius and the Maldives, while domestic excise duties on petrol and diesel remained unchanged.

Ratings agency ICRA sharply raised its estimate of net losses for Indian airlines in the fiscal year ending March 2027 to $3.81‑$4.02 billion, nearly three times its earlier forecast. The revision reflects higher ATF prices—26.9% above a year earlier—weakening of the rupee, and rising aircraft lease costs. Domestic passenger‑traffic growth for FY27 was cut to 3‑6%, and international traffic growth to 0‑3%.

To mitigate cost pressures, the government announced a 25% reduction in landing and parking charges, a $529 million emergency credit line guarantee scheme, and a $1.06 billion ATF price‑stabilisation fund.