Loss-making Air India will scale down its international operations till July, as surging jet fuel prices and airspace restrictions linked to the West Asia conflict have rendered several routes financially unviable, chief executive officer and managing director (CEO&MD) Campbell Wilson said last week.
The airline has already reduced some services in April and May, but worsening cost pressures have forced it to extend the cuts into June and July. Mr Wilson told employees that a 'massive rise' in aviation turbine fuel (ATF) prices, coupled with longer flying routes due to restricted airspace, has significantly increased operating costs.
Airspace curbs in the wake of tensions in West Asia have compelled airlines to avoid certain corridors, resulting in longer flight paths, higher fuel burn and reduced operational efficiency on several international sectors.
Air India is expected to cut around 100 flights, including international and select domestic services, with its long-haul schedule likely to be trimmed by up to 12%. However, the airline clarified that it is not cancelling all international operations, and a majority of routes will continue to function.
“We have reduced some flying for April and May… airspace closures and longer flying routes have caused many of our international flights to become unprofitable to operate,” Mr Wilson says in his message, adding that the situation remains ‘extremely challenging’.
He noted that the airline had little choice but to further rationalise its schedules, while expressing regret for the disruption to passengers and crew. Mr Wilson also voiced hope that geopolitical conditions would stabilise soon, allowing operations to return to normal.
The development comes at a time when the broader aviation sector in India is facing mounting financial stress. Airlines, through the Federation of Indian Airlines (FIA), have warned the government that soaring ATF prices — driven by global oil volatility and geopolitical tensions — are pushing the industry towards a potential crisis.
Fuel costs, which typically account for about 40% of an airline’s operating expenses, have surged to nearly 60% in recent weeks, significantly eroding margins. Carriers have flagged that the widening gap between crude oil and refined jet fuel prices, along with taxation issues, is making several routes commercially unsustainable.
Air India’s decision to trim its schedule reflects these broader pressures. The airline group is estimated to have incurred losses exceeding ₹22,000 crore in the financial year ended 31 March 2026, underscoring the financial strain it continues to face.
With India heavily dependent on imported crude oil, accounting for over 85% of its requirements, the aviation sector remains vulnerable to global supply disruptions. Industry sources indicate that airlines are closely watching upcoming ATF price revisions, with further capacity adjustments likely if costs continue to rise.
For now, Air India’s move signals the beginning of a wider recalibration in the aviation sector, as carriers grapple with a volatile cost environment and geopolitical uncertainties that show little sign of easing.
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