Indian regional airline Star Air has announced a significant reduction in its weekly flight operations, cutting between 15% and 20% of its schedule. This move brings its winter flight tally down to 52 weekly operations and comes in direct response to the escalating prices of aviation turbine fuel (ATF).
The airline's decision underscores the mounting financial pressure on India's aviation sector, particularly affecting regional carriers. In a bid to mitigate these rising operational costs and maintain vital connectivity across smaller cities, Star Air is actively seeking a special fuel-pricing mechanism tailored for regional airlines.
Rising Fuel Costs Squeeze Airline Finances
Aviation turbine fuel constitutes a major portion of an airline's operating expenses, often accounting for around 40% of total costs. The recent surge in fuel prices, partly attributed to global geopolitical events, has intensified the financial challenges faced by carriers nationwide.
For regional operators like Star Air, the impact is particularly acute. These airlines serve routes connecting smaller towns and cities, where market demand and ticket pricing flexibility are often limited. This makes it difficult for them to pass on increased fuel costs directly to passengers without affecting affordability and passenger numbers.
Star Air Proposes Special Fuel-Pricing Mechanism
Star Air's management believes that a dedicated pricing structure for regional carriers could effectively cushion the impact of volatile fuel prices. Such a mechanism would not only support affordable air travel but also bolster regional connectivity, a key objective of government initiatives like the UDAN (Ude Desh ka Aam Nagrik) scheme.
The airline has proposed an arrangement that would grant regional carriers access to aviation fuel at more stable prices. This could involve a separate pricing system specifically for airlines operating routes under government-backed regional connectivity programs. Regional airlines account for approximately 3% of India's total ATF consumption, suggesting that a targeted support mechanism could benefit these operators without requiring a broad intervention across the entire aviation industry.
This proposal follows the lapse of the government's Price Stabilisation Fund (PSF), which was introduced earlier in 2026 to offer relief to airlines during periods of exceptional fuel-price volatility. The government has yet to make a final decision on whether to reintroduce this scheme or implement alternative support measures.