US–Iran Conflict Drives Aviation Fuel Surge; Air India to Cut 100 Daily Flights Amid Rising Operational Costs

US–Iran Conflict Drives Aviation Fuel Surge; Air India to Cut 100 Daily Flights Amid Rising Operational Costs

Rising geopolitical tensions between the United States and Iran have triggered a sharp increase in aviation fuel prices in India, forcing Air India to cut 100 daily flights. The aviation sector faces mounting cost pressures due to higher ATF prices, restricted airspace over Pakistan, and growing operational challenges affecting multiple airlines.

The ongoing geopolitical tensions between the United States and Iran are increasingly impacting India’s economy, with inflationary pressures rising sharply across multiple sectors. One of the most immediate effects has been witnessed in the aviation industry, following a significant increase in Aviation Turbine Fuel (ATF) prices, forcing airlines to reconsider operational capacity.

Air India has decided to reduce its daily flight operations in response to escalating fuel costs and mounting operational burdens. According to reports, the airline currently operates approximately 1,100 domestic and international flights each day. Under the revised plan, Air India will cancel around 100 flights daily, with the curtailment expected to remain in effect until June.

The decision comes at a time when global aviation routes have been severely disrupted due to restricted airspace over Pakistan. As a result, several flights departing from India to destinations in Europe, North America, Australia, and Singapore are being rerouted through longer corridors. This has led to increased fuel consumption as well as higher crew-related expenses, further intensifying cost pressures on airlines.

In another significant development, ATF prices in Delhi witnessed a sharp increase on Friday, rising from 136,082 rupees per kiloliter to 143,335 rupees per kiloliter. This represents a 5.33 percent increase, marking the second consecutive month of price escalation. The continuous rise in aviation fuel costs has begun to directly affect airline operations and fare structures.

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Earlier in the week, the Federation of Indian Airlines, representing IndiGo, Air India, and SpiceJet, issued a warning regarding the growing financial strain on the sector. The federation stated that if the government does not take immediate measures to reduce the burden of rising operational costs, airlines may be compelled to suspend services in the future.

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The combined impact of geopolitical instability, restricted air routes, and surging fuel prices is placing unprecedented pressure on India’s aviation industry, raising concerns over long-term operational sustainability and passenger affordability.

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