Business

Oil price hike, Indian aviation industry on brink of collapse

Published by

Abdul khalique

2 months ago

Oil price

NEW DELHI: The rise in global oil prices due to the US-Iran war has plunged Indian airlines into a severe financial crisis.

According to the report, India’s aviation sector is facing losses of about $2 billion. India’s major airlines have warned that if the situation does not improve, they may have to reduce or completely stop their flights.

According to the airlines, tensions in West Asia and the increase in jet fuel prices have made their operations extremely expensive and difficult.

The Federation of Indian Airlines, which includes major airlines including IndiGo, Air India and SpiceJet, has written a letter to the Indian Ministry of Civil Aviation demanding immediate financial relief.

The airlines have demanded that the government impose a fuel price cap and temporarily suspend excise duty to control rising costs.

The letter states that India’s airline industry is under severe pressure and is on the verge of closure or suspension of operations.

According to airlines, fuel costs used to account for 30 to 40 percent of total operational costs, but now they have increased to 55 to 60 percent, making it almost impossible to operate flights as usual.

Airlines say they have faced challenges such as airspace closures in the past, but the biggest threat at the moment is the rising prices of jet fuel.

India is one of the world’s largest oil importers, so disruptions in global supply are directly affecting its economy and aviation sector.

The closure of the Strait of Hormuz has also made the situation more serious as India imports a large amount of oil from Gulf countries. Due to the crisis, flight cancellations, a decrease in travel demand and a decrease in tourist arrivals of about 20 percent are also being reported.

According to experts, if oil prices continue to rise, it will become more difficult for Indian airlines to maintain operations, while immediate financial support from the government may prove to be the only solution to this crisis in the short term.

Abdul khalique