IndiGo CEO Warns Jet Fuel Prices May Remain High, Calls for Lower Taxes and Airport Charges

IndiGo CEO Willie Walsh has warned that aviation turbine fuel (ATF) prices are likely to remain elevated in the coming months, adding to the financial pressure on India’s aviation industry. He has called on the government and airport operators to reduce taxes and airport charges to help airlines manage rising operational expenses and maintain affordable airfares.

Walsh pointed to the widening gap between crude oil prices and jet fuel costs, known as the refining crack spread, as a major reason behind the continued rise in aviation fuel prices. The spread has climbed to approximately 65%, significantly above its long-term average of around 22%. Reduced production at European refineries and disruptions to supplies from the Middle East have contributed to the situation.

ATF accounts for nearly 40% of IndiGo’s operating expenses, making fluctuations in fuel prices particularly significant for the country’s largest airline. Walsh indicated that lower crude oil prices alone may not provide immediate relief because refining margins and supply-related challenges continue to influence jet fuel costs.

He also highlighted the impact of Pakistan’s airspace restrictions on Indian carriers. The restrictions have forced airlines to take longer routes on several international services, increasing fuel consumption and operating costs. IndiGo has also reviewed its flight network and reduced some services to Saudi Arabia amid the changing operational environment.

Walsh said discussions with the Indian government had been constructive and acknowledged steps taken to address challenges confronting the aviation sector. However, he stressed that further measures were necessary to improve the industry’s cost structure.

The IndiGo chief called for rationalisation of aviation taxes, airport charges and other operating costs, arguing that reducing these expenses would strengthen the competitiveness of Indian airlines. Sustained cost reductions, he suggested, will be important for ensuring the long-term growth and financial stability of India’s aviation industry.