India’s civil aviation sector could face cost pressure as escalating tensions in the Middle East are set to hike Air Turbine Fuel (ATF) prices, Union Civil Aviation Minister Rammohan Naidu said during a media address on Saturday in Visakhapatnam.
The minister highlighted the volatile nature of fuel pricing and stated that the ATF prices, which are revised on the first of every month, may reflect the impact of the ongoing unrest as early as April 1.
“In terms of ATF, prices are decided every first of the month, so the impact might be visible from April 1,” he said, indicating that aviation fuel costs are likely to rise in the coming cycle.
Civil Aviation ministry determined to minimise burden despite expected price rise
The Middle East remains a prominent hub for global oil supply, and any instability in the region directly impacts crude oil prices, which subsequently affects ATF rates. As fuel expenses account for a considerable chunk of operational costs in the airline sector, this makes them vulnerable to such fluctuations. Due to this reason, the ministry is in continuous contact with airlines to assess the potential financial and operational impact. Feedback from carriers is being actively taken to ensure that any follow-up decision would be both practical as well as timely. Meanwhile, the minister stated that the government’s immediate priority is to maintain safe and uninterrupted flight operations, particularly on routes connecting India with the Middle East.
“The first and foremost is that we want to have safe operations especially to the Middle East and second is the kind of economic impact it might create on the airlines and its operations, we are taking feedback from the airlines and we are in discussion because it’s a multi departmental exercise.”
Despite the expected increase in prices, the government has expressed its commitment to minimising the burden on both airlines and passengers. Naidu said that multiple ministries, including Civil Aviation, External Affairs, and Petroleum and Natural Gas, are working in close coordination to manage the situation.
“Civil aviations, external affairs, petroleum & natural gas, all the ministries have to sit and do it together. In the interest of passengers, we will definitely try to see what best we can do to the airlines,” he said.
He further said, “The ATF prices are going to be impacted, but the impact should not be translating onto the operations or the passengers. That will be the intention of the ministry and we will engage in the positive way.”
