IndiGo CEO warns jet fuel costs will stay high, seeks lower taxes

Air travel could remain expensive for some time as airlines continue to grapple with high jet fuel prices and rising operating costs. IndiGo CEO Willie Walsh has warned that aviation companies are facing a difficult environment, with fuel costs and airspace restrictions adding to the pressure.

Speaking about the challenges facing the aviation sector, Walsh said jet fuel prices were likely to remain elevated in the short term, even though crude oil prices were not at historically high levels. He also called for lower taxes and airport charges, saying these costs were making it harder for airlines to operate in India.

Jet fuel, also known as aviation turbine fuel (ATF), accounts for around 40% of IndiGo's operating costs, making the recent price rise a major concern for the airline.JET FUEL PRICES TO REMAIN HIGH, SAYS INDIGO CEO

Walsh said the problem was not just the price of crude oil but the unusually high premium that jet fuel was commanding over crude.

He pointed out that crude oil was trading at around $110-111 per barrel, below the levels seen in 2008, when prices touched $150 per barrel. However, the difference between crude oil and jet fuel prices, known as the crack spread, has increased sharply.

According to Walsh, the long-term average crack spread between 2000 and 2025 was around 22%, but it is currently close to 65%.

He attributed the increase to global disruptions in jet fuel refining. European refineries have reduced their jet fuel production, while supplies from the Middle East, including Kuwait, have also been affected.

"We are seeing some recovery in the production of crude oil. We're not seeing the corresponding and significant increase in jet fuel production," Walsh said.

He added that the situation could take some time to improve and jet fuel prices would remain at elevated levels in the near term.

The airline has been absorbing a significant part of the higher fuel costs, Walsh said, adding that the company was managing the situation as best as possible.INDIGO CEO CALLS FOR LOWER TAXES AND AIRPORT CHARGES

Apart from fuel prices, high airport charges and taxes are adding to the cost pressures faced by airlines.

Walsh said the Indian aviation market could perform better if taxes and airport charges were lower.

"Airport charges are too high. This market would do much better if it had lower taxes. Lower taxes, lower airport charges is the way forward," he said.

He pointed out that airport charges increased 4% in the second quarter compared with the first quarter.

Walsh also said airlines needed better value from airports and expected them to be more competitive on pricing, particularly because airports effectively operate as monopolies.

He added that cost management would be important for IndiGo as it looks to expand its operations in India.

On discussions with the Indian government over the rising cost pressures, Walsh said the conversations had been constructive. He also credited the government for taking initiatives to help manage the situation.PAKISTAN AIRSPACE CLOSURE ADDS TO AIRLINE CHALLENGES

The closure of Pakistan's airspace continues to pose challenges for Indian airlines, Walsh said.

He added that IndiGo was constantly reviewing its network and managing operations in the best possible way amid geopolitical developments.

The airline has also reduced services to Saudi Arabia, with Walsh stressing that passenger and crew safety would remain its priority.

"We won't do anything that would create risk for the safety of passengers or crew," he said.

On the possibility of hedging fuel costs, Walsh said it was a difficult management decision. He noted that around 40% of Asian carriers and 70% of European carriers were hedged, but IndiGo would carefully assess the decision before taking any such step.NAVI MUMBAI AIRPORT OFFERS EXPANSION OPPORTUNITY

Walsh also spoke about IndiGo's plans for Navi Mumbai airport, saying it represented a significant opportunity for the airline as it looks to expand its long-haul operations.

He said the airline had good relations with Adani Airports and would take decisions about its operations at Navi Mumbai in the best interests of the company.

Walsh also pointed out that Mumbai airport's terminal needed renovation, which could have an impact on operations whenever the work takes place.

"We want to make sure we have capacity to expand. We are happy to work with the airport, we look at long-term investment for domestic and international operations," he said.

Despite the current cost pressures, Walsh said IndiGo would continue to operate as a low-cost carrier and focus on managing its expenses while looking at opportunities for future growth.- Ends

Amit Bhardwaj is among the “politics-election buff” journalists redefining how news connects with a younger audience. Currently an Associate Editor at India Today, he has built a reputation for incisive on-ground reporting right from centre of politics - the Indian Parliament, to the machine of politics- high-stakes Indian elections and to civil aviation sector. 

In the last eleven years, he has tracked India through a dozen state elections and consistently reported from the heart of India’s political churn, with a strong focus on the evolving dynamics of the opposition- INDIA bloc. He also tracks Aam Aadmi Party and Telugu Desam Party.

Known for blending easygoing storytelling with factual reportage, Amit Bhardwaj has delivered consistently from mines to skies. He has covered the rescue operations and rat miners in Joshimath. He extensively covered the tragic Air India 171 Ahmedabad crash in June 2025. His work on airline disruptions including the Indigo 2025 crisis, regulatory crackdowns, and aviation safety has added a distinct edge to his political reporting portfolio.   

Amit was amongst few India journalists to witness Nepal's GenZ revolution firsthand as it was unfolding on the streets of Kathmandu. His documentary "Joshimath: A Cry For Help" was awarded ENBA Gold for Best In-depth Series.  

Before joining India Today, he honed his craft at Newslaundry and Tehelka- in its prime, it was a thing- and has also contributed long-form pieces to The Caravan.  

A distinct voice with a cheerfully incisive tone on the popular podcast Reporters Off Air, Bhardwaj brings insider perspectives and futuristic predictions .  

Amit hails from Jharkhand, and often greets others with Jai Johar!