India, June 11 -- Domestic air travel could become more expensive after state-owned oil marketing companies increased Aviation Turbine Fuel (ATF) prices for domestic airlines by nearly 10%, raising one of the aviation sector's largest operating costs.

The price hike comes alongside the introduction of a government-backed price stabilisation mechanism that allows airlines to lock in ATF prices for up to three years, helping shield carriers from global fuel price volatility.

Under the voluntary scheme, participating airlines will pay a fixed ATF rate of Rs.115 per litre, compared to the earlier price of Rs.104.93 per litre. Airlines opting out of the scheme will continue purchasing fuel at market-linked rates, which are currently around R...