New Delhi: The aviation sector has warned that it is under severe financial strain due to surging aviation turbine fuel prices amid the ongoing disruptions in fuel trade due to the United States-Israel war on Iran. The sector, represented by the Federation of Indian Airlines (FIA), has said the sector is being pushed towards a “potential shutdown” of operations, according to a report in the Hindustan Times.The FIA has written to the Union Ministry of Civil Aviation seeking “urgent intervention” by the government, saying the current pricing environment has placed the industry under “extreme stress” and brought it to the verge of stopping operations. The airline body, which represents carriers including Air India, IndiGo and SpiceJet, said the situation has been worsened by the ongoing conflict in West Asia and sharp increases in fuel costs.“In order to survive, sustain and continue operation, we request your urgent intervention for immediate and meaningful financial support to tide over the current situation,” it said in the letter dated April 26, NDTV reports.In its communication, the federation said international operations have become “completely unviable” following a steep rise in aviation turbine fuel prices, including an increase of Rs 73 per litre for international routes. It added that domestic operations were also under pressure, with the significantly raising operating costs.According to the airline body, aviation turbine fuel typically accounts for around 30-40% of total operating costs but this has now risen to between 55-60% due to the surge in prices. It also noted that the Indian rupee’s depreciation has further added to input costs, intensifying financial pressure on carriers.Also read: Rupee Ends at 94.05 Against Dollar, Real Effective Exchange Rate Lowest in 12 Years“With the abnormal increase in ATF prices from the pre-crisis period, adding rupee depreciation to the increased prices, the 11% excise duty also increases manifold for the airlines and adds to the ATF price as a big impact on airlines,” the federation said, according to NDTV.The excise duty on aviation turbine fuel is a fixed percentage tax set by the government, so the amount paid increases when ATF prices rise because it is applied to fuel costs during an upswing in fuel prices. The airlines have sought temporary deferment of this duty, the Hindu reports.The federation has urged the government to adopt a uniform pricing mechanism for aviation turbine fuel across domestic and international operations and has sought temporary relief measures including deferment of excise duty on fuel, which currently stands at 11%. It said inconsistent pricing structures and sharp increases in fuel costs could lead to significant losses and potential grounding of aircraft.“… Any ad hoc pricing (domestic vs international) and/or irrational increase in the price of ATF will result in insurmountable losses for airlines and will lead to grounding of aircraft, resulting in cancellation of flights,” the FIA said, according to the NDTV report.“The April ’26 pricing outcomes do not ensure parity between domestic and international operations,” the airline body said, according to HT.Last month, the Union government hiked ATF price by Rs 15 per litre for domestic operations and by Rs 73 per litre for international operations.According to a report in the Hindu, the FIA letter points out that Delhi has the second-highest value-added tax (VAT) of 25% on jet fuel, while the highest rate is 29%, levied in Tamil Nadu.“The other major aviation cities, viz. Mumbai, Bangalore, Hyderabad, and Kolkata range between 16 per cent and 20%. These 6 cities cover more than 50% of airlines’ operations within India,” the federation said.The concerns come amid the disruptions in global energy markets following tensions in West Asia, including the blockade of the Strait of Hormuz, a key transit route for global oil shipments. The resulting volatility has driven up crude oil prices internationally, with knock-on effects on aviation fuel costs in India.The airline industry has cautioned that without immediate government support, the ongoing cost pressures could lead to widespread cancellations and disruptions on domestic as well as international routes.