West Asia Conflict Squeezes Indian Airlines: Revenue Drops, Fuel Costs Soar

Speaking during an inter-ministerial briefing on recent developments in West Asia, Ao said airlines are facing a two-fold challenge due to the crisis, which began over a month ago.

"50 per cent of all international operations by Indian carriers used to be to this region. International flights are a good source of revenue for airlines, so it has definitely impacted their revenue income, which affects their financials," he said.

He added that the second major challenge is rising Aviation Turbine Fuel (ATF) costs. While there was an increase in ATF prices, the government ensured that the rise remained moderate for domestic routes.

Airlines have now factored these costs into their pricing, with most carriers introducing distance-based surcharges to offset the increase in operational expenses.

"That is basically to cover the difference between operational cost due to increasing ATF pricing," he said.

On 1st April, in a move aimed at protecting domestic air travel from a sharp global fuel shock, the government has limited the increase in Aviation Turbine Fuel (ATF) prices for domestic airlines to 25%, even as international benchmarks indicated a potential surge of over 100%.

The Ministry of Petroleum and Natural Gas said the decision comes in response to an "extraordinary situation in global energy markets," triggered by the closure of the Strait of Hormuz. To prevent a steep rise in airfares, public sector oil marketing companies, in consultation with the Ministry of Civil Aviation, implemented only a partial and staggered increase.

During the briefing, Joint Secretary Asangba also shared that despite the pressures, the passenger demand remains strong, especially on domestic routes. He noted that more than 4,70,000 passengers travelled in a day recently, with over 3,300 flights operating daily and high passenger load factors.

The government has taken several steps to support the sector and ensure passenger convenience. Ao said timely intervention in ATF pricing, which accounts for around 40 per cent of airline operational costs, has helped keep domestic airfares stable.

The Ministry of Civil Aviation is also working closely with stakeholders to explore ways to reduce costs, which could eventually benefit passengers.

The conflict has led to airspace closures or restrictions in countries such as Israel, Jordan, Lebanon, Kuwait, Qatar, Bahrain, and the UAE, causing major disruptions in global aviation networks.

Due to these restrictions, Indian carriers operating flights to Europe and North America are taking longer routes, increasing travel time and costs. However, Ao said airlines have shown resilience and operational agility in managing these challenges.

To ease operational strain, the Directorate General of Civil Aviation (DGCA) has temporarily relaxed Flight Time Limitation (FTL) norms for pilots on long-haul routes to prevent crew shortages. He added that these relaxations will be reviewed as the situation evolves.

Additionally, to maintain essential supply chains, foreign carriers such as Emirates, Kuwait Airways and Jazeera Airways have been allowed to operate passenger aircraft for cargo services.

"This has ensured seamless continuity of critical cargo movement despite disruptions," Ao said.

He emphasised that the government remains committed to ensuring passenger safety, uninterrupted cargo operations and overall sector stability, while continuing close coordination with all stakeholders during the evolving situation.

- ANI