NEW DELHI, INDIA – India’s aviation industry faces collapse as three major airlines warn the government of a complete shutdown.
Existential crisis for Indian airlines
Three major Indian airlines are raising the alarm and demanding urgent state support. Without financial aid, Air India, IndiGo and SpiceJet could be forced to cease operations entirely.
In a joint letter to the government, the companies demanded immediate changes in the pricing of aviation fuel. The current financial burden is no longer sustainable for the carriers.
Fuel costs devour profits
Aviation turbine fuel now accounts for about 40 percent of an airline’s total operating costs. Prices continue to rise due to tensions in the Middle East and new airspace restrictions.
The weak rupee is also weighing on Indian airlines’ daily expenses. The combination of expensive oil and a weak currency is driving the sector into a deep crisis.
Demand for tax relief
The industry association Federation of Indian Airlines is calling for a temporary suspension of the 11 percent consumption tax on jet fuel. Only this can keep flight operations in the country viable in the long term.
If prices remain disconnected from actual costs, drastic consequences are looming. The association warned of grounded aircraft and massive flight cancellations across the Indian aviation system.
Lufthansa cancels thousands of flights
In Europe, the industry is also responding with tough cuts to the global fuel crisis. The Lufthansa Group is suspending more than 20,000 short-haul flights at six major hubs until October.
Affected airports include Frankfurt, Munich, Zurich, Vienna, Brussels and Rome. By this measure, the group aims to save about 40,000 tons of fuel and respond to the looming shortage.
Concern for global air traffic
The crisis shows how sensitive global air travel is to political conflicts and rising energy costs. Travelers worldwide must prepare for higher prices and fewer connections.