Govt in talks with airlines and OMCs over rising ATF prices
Union Minister Ram Mohan Naidu confirms talks with airlines and OMCs to manage surging aviation turbine fuel costs caused by West Asia tensions.
The Indian government has entered into active discussions with both airlines and oil marketing companies (OMCs) to manage the growing economic pressure caused by soaring Aviation Turbine Fuel (ATF) prices. Union Civil Aviation Minister Ram Mohan Naidu confirmed that the geopolitical crisis in West Asia is a primary driver behind the rising costs, which are significantly impacting the aviation sector.
West Asia crisis drives fuel costs to decade highs
Speaking at the IQFM Symposium 2026, Minister Naidu highlighted that the instability in West Asia is placing a heavy burden on fuel expenses. "One of the most important things is the West Asia crisis and how it's putting a big burden on the ATF prices. But, we are still in discussion both with the airlines and also the OMCs," Naidu stated, adding that the outcome of these talks remains to be seen.
The urgency of these discussions is underscored by recent actions from major carriers. IndiGo has already implemented a revision of fuel charges for all new bookings starting October 6. The airline noted that the month-on-month increase in fuel costs has exceeded 14%, driving ATF prices to levels not seen in the last decade due to the ongoing geopolitical developments.
Strengthening Regional Connectivity and Manufacturing
Beyond the immediate fuel crisis, the Minister provided updates on broader aviation initiatives, including the UDAN scheme. He noted that the government has supported regional connectivity by providing viability gap funding to ensure that commercially challenging routes remain operational. "Through the scheme in the last 10 years, we have started 693 routes," Naidu remarked.
The Minister also shared ambitious goals for India's aerospace manufacturing sector. Currently, Indian companies produce approximately USD 4 billion worth of aerospace equipment and components. However, the government is aiming for a massive expansion, targeting a production value of USD 10 billion by the end of the decade.
Strategic Partnerships with Global Giants
As India seeks to move up the global value chain, major international players like Airbus and Boeing are increasingly collaborating with Indian MSMEs. Naidu suggested that these global manufacturers see a strategic advantage in the Indian market, helping to improve product quality and integrate local businesses into the global supply chain.