Nagpur: The city's aviation and business community has warmly welcomed the Union Cabinet's approval of a ₹10,000 crore Aviation Turbine Fuel (ATF) Price Stabilisation Fund, expressing optimism that it could help revive cancelled and suspended flight routes from Nagpur and strengthen long-term air connectivity. The scheme is designed to shield airlines from extreme volatility in global fuel prices caused by geopolitical tensions and supply chain disruptions. Under the mechanism, oil marketing companies (OMCs) will receive interest-free financial support to supply ATF at more stable, pre-agreed rates, with the government absorbing temporary price shocks.
Industry Leaders Applaud Move
Ashish Kale, president of the Association for Industrial Development (AID), highlighted that fuel constitutes nearly 40% of airline operating costs, and stabilisation of ATF prices will significantly improve financial planning for carriers. He noted that while immediate fare reductions may not be guaranteed, the policy will likely help maintain stable ticket prices and improve airline balance sheets. Kale also pointed out that several flights from Nagpur had been withdrawn due to fuel-related pressures and expressed hope that the new mechanism would encourage airlines to restore lost connectivity. He added that predictable fuel pricing could strengthen long-term route planning and make previously unviable routes commercially sustainable again.
Support from Economic Bodies
Rina Sinha, president of the Vidarbha Economic Development Council, echoed similar views, stating that the real benefit of the scheme lies in cost predictability rather than direct fare cuts. She said stable fuel pricing could help revive smaller routes that were earlier considered loss-making, particularly in emerging cities like Nagpur. However, she added that while fares may not reduce significantly, the policy could prevent sharp spikes that usually follow global fuel shocks.
Calls for Restoring Services
Industry voices also emphasised the importance of restoring suspended services. Tejinder Singh Renu of the Vidarbha Taxpayers Association urged airlines to pass on any cost benefits to passengers and ensure affordable connectivity. Chamber of Small Industry Associations (COSIA) chairman (Vidarbha) Julfesh Shah also called for immediate restoration of cancelled flights, stating that service disruptions have affected business travel, tourism, and investment flows in the region.
Potential Benefits for Regional Connectivity
Stakeholders believe the measure could be particularly beneficial for cities like Nagpur, which have seen route rationalisation in recent months due to rising aviation fuel costs. They argue that improved stability in ATF pricing may encourage airlines to reconsider suspended routes and expand regional connectivity networks. On the other hand, the airlines themselves have not issued any update on whether cancelled flights across the country will be resumed or not. While they have praised the government's stance, it remains to be seen what course of action these companies take.
