India Keeps Domestic Jet Fuel Prices Unchanged for June After Airline Plea Amid Iran Conflict

Indian airlines received some relief at the start of June after state-owned oil marketing companies (OMCs) decided not to raise aviation turbine fuel (ATF) prices for domestic flights.

Under the latest monthly revision, domestic ATF prices were left unchanged at ₹104,927 per kilolitre in Delhi. The move follows a request from airlines to avoid further fuel price increases.

Domestic jet fuel prices had already risen 8.6% in April before remaining unchanged in May. June marks the second consecutive month without an increase.

In another positive development for carriers, OMCs also reduced jet fuel prices for international flight operations by $400 per kilolitre.

Why Did Oil Companies Keep Domestic ATF Prices Unchanged?

The industry had requested a freeze on domestic jet fuel prices until the Iran conflict eased.

ATF remains one of the largest expenses for airlines. Airlines have increasingly adjusted schedules, reduced frequencies and suspended select routes as they look to manage costs and preserve profitability.

The government had already stepped in during April by capping domestic ATF price increases at 25%. Prices were subsequently frozen in May and have now remained unchanged for June as well.

The latest revision is also part of a broader effort to shield domestic consumers from the sharp swings seen in global crude oil markets.

What Other Challenges Are Airlines Facing?

A weaker rupee has made several day-to-day expenses more expensive. Aircraft lease rentals, overseas airport charges and other payments linked to the US dollar have all become costlier for carriers in recent months.

Operational disruptions have added further pressure. Indian airlines had been using Iranian airspace for flights to Europe and North America after losing access to Pakistani airspace. Airlines have also had to deal with route adjustments following disruptions to key air corridors.

Air India recently announced temporary reductions across select domestic and international routes between June and August 2026. The airline said the move is aimed at improving operational reliability and managing fleet availability.

Industry sources suggest IndiGo has also been making adjustments to its network and operations.

Average booking values for international travel climbed from about ₹22,700 in February to more than ₹32,600 in May. On domestic routes, the figure increased from roughly ₹8,800 to ₹9,400 over the same period.

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What Relief Measures Has The Government Announced For Airlines?

Alongside the ATF price freeze, a series of support measures have been rolled out for the sector.

Delhi and Maharashtra have reduced VAT on aviation turbine fuel, while AERA has asked major airports to lower landing and parking charges for domestic flights by 25%.

The Centre has also suspended the 60% free-seat allocation requirement and removed airfare caps, giving airlines more flexibility in managing ticket prices.

Separately, flight duty time norms for certain long-haul operations have been eased on a temporary basis as airlines deal with disruptions in international aviation.

Sources:

The Economic Times

The Hindu Business Line