New Delhi: Air travellers may soon see fewer sudden spikes in ticket prices even as aviation turbine fuel (ATF) prices have been raised by nearly 10%, with the government introducing a new mechanism that allows airlines to lock in fuel costs for up to three years.

Under the revised pricing structure announced on Tuesday, domestic airlines opting into the voluntary stabilisation scheme will pay around Rs 115 per litre for jet fuel, compared with about Rs 105 per litre earlier.

The increase comes alongside a broader government effort to shield airlines from sharp swings in global oil prices, which are often passed on to passengers through higher airfares.

Airlines joining the scheme will get fuel at a fixed rate, insulating them from sudden international price spikes. Carriers that stay out of the programme will continue to buy fuel at market-linked rates, benefiting when prices fall but facing higher costs when they rise.

The move follows months of volatility in global energy markets that pushed jet fuel prices sharply higher and raised concerns about rising operating costs for airlines.

Fuel is one of the biggest expenses for carriers, accounting for a substantial share of operating costs. As a result, fluctuations in ATF prices frequently influence airfare trends, particularly during periods of geopolitical uncertainty.

To support the new framework, the Centre has approved a Rs 10,000-crore price stabilisation mechanism. Officials say the arrangement is designed to smooth fuel-price volatility rather than provide a subsidy, with any support extended to oil companies expected to be recovered when global prices ease.

For passengers, the key takeaway is greater fare predictability. While ticket prices will continue to depend on demand and other operating costs, the new system is expected to reduce the risk of abrupt fare hikes triggered solely by sharp increases in jet fuel prices.

With PTI inputs