Travellers attention! Air travel is set to become more expensive in the coming days. The reason behind this is that the aviation firms are set to pass down the increasing burden of higher ATF costs. Yes, the Air Turbine Fuel (ATF) prices have been hiked by 10 per cent by the Oil Marketing Companies (OMCs). This hike is under the new price-stabilization regime. Here’s everything you must know about the price hike news:
Jet Fuel Prices Increased, Air Travel To Become Costlier
Aviation firms are set to pass down the burden of higher jet fuel costs to the passengers. This accounts for about 60 percent of the total operational cost. The jet fuel for domestic carriers, under the new regime, will now cost INR 115 per litre. This is higher than the earlier cost of INR 105 per litre.
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What is The New Price-Stabilization Regime?
Introduced in June 2026, the new price-stabilization regime is a government-backed mechanism. It is created to protect the airlines from extreme, unstable, and unpredictable hikes in the aviation turbine fuel prices. These fuel prices are triggered because of the online crude oil prices as a result of the ongoing Iran-US war.
A fund of INR 10,000 crore has been set up by the government for the ATF stabilization regime. The regime locks the ATF prices for the next three years to offer certainty to the airlines over fuel costs. Under the regime, the government will also compensate the OMCs if the fuel prices rise globally over the set mark.
When the prices of ATF fall, the benefits of the same are not passed down by lowering the prices. Instead, the government recovers the support it offers using a “true-up” mechanism.
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Domestic Operations Being Cut Down By Airlines
The high fuel prices triggered by the chaos in West Asia have led the airlines to reduce domestic operations. Many Indian airlines like IndiGo and Air India have cut down their domestic flight operations from June 01, 2026.
The operational costs of the airlines are increasing because of the rise in jet fuel prices. They have limited leverage to pass the same down to the passengers in the form of ticket prices. Hence, the airlines are choosing to cut down their operations. As per a report by News 18, IndiGo will reduce up to 5 to 7 percent of its domestic services, while Air India will reduce its services up to 22 percent.
Also Read: IndiGo Temporarily Suspends Flight Operations To 7 International Destinations
Summing Up
The aviation Turbine Fuel has been hiked by 10 percent under the new regime by the government. The price of the jet fuels will now remain the same as hiked now for the next 3 years as per the regime.
