New Delhi: India’s leading airlines, Air India and IndiGo, are set to reduce domestic flight operations beginning June 1 as soaring aviation fuel prices triggered by the escalating crisis in West Asia sharply increase operational costs across the aviation sector.
The two airlines together account for nearly 90 percent of India’s domestic aviation market, making the planned reduction in services significant for passengers and the broader travel industry. Reports indicate that Air India may cut up to 22 percent of its domestic operations, while IndiGo is expected to scale down between 5 and 7 percent of its services on selected routes.
The decision comes amid a steep rise in Aviation Turbine Fuel prices, which airlines say has made several routes financially unsustainable. Industry officials believe carriers have limited room to increase ticket prices further, as higher fares could impact passenger demand in an already competitive market.
The sharp increase in fuel prices has been linked to the ongoing tensions involving Iran and the United States, which disrupted crude oil movement through the strategically important Strait of Hormuz. The waterway is one of the world’s most critical shipping routes for crude oil and natural gas supplies, and concerns over supply disruptions have pushed global oil prices upward.
As crude prices surged, Indian oil marketing companies reportedly increased ATF prices to offset mounting losses. Aviation fuel now reportedly costs over Rs 1 lakh per kilolitre, compared to around Rs 80,000 earlier, sharply increasing the burden on airlines. Industry estimates suggest fuel accounts for more than half of an airline’s operational expenses.
The Federation of Indian Airlines, representing Air India, IndiGo and SpiceJet, had earlier urged the Civil Aviation Ministry to provide urgent support to manage ATF pricing volatility.
Airlines have warned that continued unpredictability in fuel costs could impact both domestic and international operations, with carriers increasingly forced to reassess flight schedules and route profitability in the face of mounting financial pressure.
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