In a significant move aimed at safeguarding India's aviation sector amid soaring fuel costs, the Union Cabinet has approved a ₹10,000 crore Aviation Turbine Fuel (ATF) Price Stabilisation Fund to support scheduled Indian airlines in their domestic and international operations. The decision comes at a time when global energy markets have been witnessing sharp volatility due to the ongoing crisis in West Asia.
Briefing the media in New Delhi, Union Minister for Information and Broadcasting Ashwini Vaishnaw said that the fund would operate as a self-sustaining revolving mechanism designed to stabilise ATF prices for Indian carriers. He emphasized that the initiative would provide much-needed relief to airlines facing unprecedented increases in fuel expenses, thereby ensuring continuity and affordability of air services.
ATF is one of the largest components of airline operating costs, and the recent surge in international fuel prices has placed considerable financial pressure on carriers. According to the government, international ATF prices have risen nearly 2.5 times—from ₹60.5 per litre in March to ₹142 per litre in May this year. The sharp increase has been driven largely by geopolitical tensions and supply disruptions linked to developments in West Asia.
To address this challenge, the government will provide a one-time budgetary support of up to ₹10,000 crore as an interest-free advance to Oil Marketing Companies (OMCs). The funds will be used to support ATF price stabilisation measures for scheduled Indian airlines, helping to cushion the impact of global price fluctuations and maintain operational stability.
The government believes that the initiative will not only support airlines but also protect the broader aviation ecosystem, which contributes significantly to employment and economic activity. Minister Vaishnaw stated that the decision would help safeguard approximately 77 lakh jobs that are directly and indirectly dependent on the aviation sector. These include employment opportunities in airports, ground handling services, maintenance operations, tourism, hospitality, logistics, and allied industries.
Industry experts have welcomed the move, noting that stabilising fuel costs can help airlines manage operational expenses more effectively and avoid passing the burden entirely onto passengers through higher airfares. The measure is also expected to strengthen the resilience of Indian carriers at a time when global aviation markets continue to face uncertainty.
The Cabinet's decision reflects the government's commitment to supporting critical sectors affected by international economic developments. By creating a dedicated price stabilisation mechanism, the government aims to ensure that Indian airlines remain competitive, financially stable, and capable of sustaining growth despite external challenges.
As the aviation industry continues to recover and expand, the ATF Price Stabilisation Fund is expected to play a crucial role in maintaining connectivity, protecting employment, and supporting India's broader economic growth objectives.
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