Cabinet approves ₹10,000 crore ATF stabilisation fund to support Indian airlines
The Union Cabinet has approved a one-time ₹10,000 crore Aviation Turbine Fuel (ATF) Price Stabilisation Fund to help Indian airlines cope with soaring fuel costs triggered by the ongoing West Asia crisis. The financial support will be provided to oil marketing companies (OMCs) as interest-free advances, enabling them to moderate ATF prices for scheduled domestic carriers.
Under the scheme, OMCs will be compensated when international ATF prices rise above a government-set benchmark. The mechanism aims to provide airlines with greater predictability in fuel costs and reduce the impact of sudden global price spikes on operations.
The facility will be available to all willing scheduled Indian airlines operating both domestic and international services. Participating carriers will procure fuel from OMCs under a fixed-price arrangement for up to three years, subject to annual reviews.
The government said the move will help maintain domestic and international air connectivity, limit fare increases for passengers, and support regional routes connecting Tier-II, Tier-III and remote destinations. ATF currently accounts for nearly 40% of airline operating costs, making fuel price volatility a major challenge for the sector.
The decision comes as global aviation fuel prices have surged sharply amid geopolitical tensions in West Asia and operational challenges caused by airspace restrictions in the region.
