The ongoing conflict in West Asia has dealt a severe blow to India’s aviation sector, with airlines facing unprecedented challenges amid rising fuel costs, airspace restrictions, and disrupted routes. The global aviation industry is reeling from the fallout of the US-Israel war against Iran, which began on February 28, resulting in a $53 billion loss in value for the world’s 20 largest publicly listed airlines, according to the Financial Times.
India’s airlines are particularly hard-hit. With profit margins shrinking and passenger dissatisfaction mounting, the industry is experiencing a significant downturn. The conflict has forced airlines to reroute flights, significantly increasing operational costs and travel times.
Longer Routes and Rising Costs
Airspace restrictions across West Asia—an essential corridor for flights to the US and Europe—are forcing airlines to take longer detours. Since Pakistan banned Indian carriers from its airspace last year, Indian flights heading to Europe and North America are now avoiding conflict zones by flying longer southern routes. This has led to a surge in fuel consumption and operational expenses, with some routes taking up to twice as long.
For example, Air India’s Delhi–London flight now takes over 12 hours, up from approximately eight hours, while its Mumbai–New York service, previously a direct 13-14 hour flight, now involves a stopover in Rome, extending the total journey to nearly 21 hours. These delays add an estimated 30% to quarterly operating costs.
IndiGo, India’s leading low-cost carrier, is even more impacted. Its fleet of European-registered Boeing Dreamliners faces restrictions under EU safety advisories, forcing the airline to fly longer routes via Africa. One recent Delhi–Manchester flight was turned back after Eritrean authorities refused passage, illustrating the operational chaos.
Reduced Operations and Financial Strain
The ongoing hostilities have led Indian carriers to significantly curtail their West Asia operations. IndiGo has suspended flights to Doha, Kuwait, Bahrain, Dammam, Fujairah, Ras Al Khaimah, and Sharjah until March 28. Meanwhile, Air India has canceled around 2,500 flights to the Gulf region since the conflict escalated and is operating only about 30% of its usual Gulf schedule, according to CEO Campbell Wilson.
Once a vital corridor connecting millions of Indian workers, tourists, and business travelers, these routes are now severely restricted, impacting the flow of passengers and revenue.
Fuel Prices Skyrocket
Jet fuel, which accounts for 35-45% of airline operating costs, is also on the rise. Prices in Delhi and Mumbai have surged to approximately $817 per kilolitre, significantly increasing costs for all carriers. Airlines are passing these costs onto passengers through hefty fuel surcharges—Air India, for instance, has added a Rs 399 surcharge on domestic flights and up to Rs 16,600 on long-haul international routes.
IndiGo has introduced surcharges ranging from Rs 425 to Rs 2,300 per sector, depending on the flight distance. Other carriers, such as Akasa Air, are implementing similar levies. The rising fuel prices, combined with a depreciating rupee and longer routes, threaten to further dampen passenger sentiment and profitability.
Industry Outlook
Union Civil Aviation Minister Ram Mohan Naidu warned that airlines could face additional cost pressures from April 1 as fuel prices remain high. Despite initial optimism at the start of 2025—marked by new routes and expanding fleets—the ongoing conflict has cast a shadow over the industry’s prospects.
If the West Asia crisis persists, India’s aviation sector may struggle to recover, leaving airlines to navigate turbulent skies for weeks to come.