How much have domestic airfares risen in past year, and what are India's ATF blending targets?

Domestic airfares across 72 routes have risen by around 20.5% between March 2025 and June 2026, the government informed Parliament on Tuesday.

In a written reply to the Rajya Sabha, Minister of State for Civil Aviation Murlidhar Mohol said airlines' operating costs are influenced by multiple factors, including international ATF prices, foreign exchange rates, excise duties, VAT, lease rentals and airspace-related operational disruptions.

The Directorate General of Civil Aviation (DGCA) has observed an approximately 20.5% increase in average airfares on 72 domestic sectors during the period, he said.

The aviation turbine fuel (ATF) alone accounts for 35-40% of the total operating expenses of airlines, the minister added.

The government has enacted the Protection of Interests in Aircraft Objects Act, 2025 to lower lease rentals and borrowing costs, rationalised central excise duty and GST on maintenance, repair and overhaul (MRO) components and contracts, and urged states and Union Territories to reduce VAT on ATF.

The government also provided one-time budgetary support of up to ₹10,000 crore to oil marketing companies for ATF price stabilisation support to scheduled Indian airlines amid exceptional fuel price volatility arising from the West Asia crisis.

For domestic operations, ATF prices were capped at a maximum increase of 25% over the March 1, 2026 base price for April and May this year, Mohol said.

The DGCA's Tariff Monitoring Unit monitors airfares on 78 selected routes every month through airline websites to ensure fares remain within the declared pricing bands.

According to data shared by the minister, ATF production stood at 16.43 million tonnes in 2025-26, while consumption was 9.16 million tonnes. Production was 10.29 million tonnes and consumption 5.01 million tonnes in 2021-22.

SAF blending in ATF

In a separate reply, Mohol said the government has approved indicative Sustainable Aviation Fuel (SAF) blending targets of 1% by 2027, 2% by 2028 and 5% by 2030 for international flight operations.

He said public sector oil marketing companies are working towards achieving these targets.

SAF is an alternative fuel made from non-petroleum feedstocks, including the food and yard waste portion of municipal solid waste, woody biomass, fats, greases, oils, and other feedstocks.

According to International Civil Aviation Organization (ICAO), SAF has the greatest potential to reduce CO2 emissions from international aviation.

Mohol said that the PM JI-VAN Yojana provides financial assistance for setting up commercial and demonstration plants for advanced biofuels, including SAF, but did not announce any separate tax exemptions or subsidies for airlines using the fuel.