India setting up the ATF price stabilisation fund is a very good solution to address the problem of higher jet fuel costs being faced by the domestic airlines, a senior IATA executive has said.
While mentioning that the current jet fuel scenario globally is unprecedented in terms of the cost impact, Hemant Mistry, Director Energy Transition at IATA, cautioned that if the situation continues, there would have to be more flight reductions.
The International Air Transport Association (IATA) represents over 370 airlines, including Air India, IndiGo, Air India Express and SpiceJet. The grouping accounts for around 85 per cent of the global air traffic.
Mistry said the jet fuel situation in terms of cost impact is unprecedented.
"If the situation continues, there will have to be more demand destruction... that is the only way to manage the situation, it is an extreme situation," he told PTI.
Demand destruction broadly refers to a reduction in flights amid rising operational costs, driven by higher jet fuel prices.
He was speaking on the sidelines of the IATA AGM in the Brazilian city.
Mistry said the jet fuel prices are dissociated from the prices of crude. "We have seen that average price of jet fuel increased from USD 96 per barrel in November last year to USD 188 per barrel in April this year and has settled at around USD 156 per barrel." According to him, the Indian government's decision to set up an up to Rs 10,000 crore ATF (Aviation Turbine Fuel) price stabilisation fund will address the problem of rate uncertainties faced by airlines.
"The ATF price stabilisation fund is a very good solution to address the problem. It is a very good output from the government," he said on Saturday.
The current energy shock should add even more urgency to the development of renewables, including SAF, and the sustainable aviation fuel production is projected to touch around 2.4 million tonnes this year, accounting for just 0.8 per cent of the global jet fuel use, according to airlines' grouping IATA.
07/06/2026 PTI/Telegraph
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