Air India is cutting nearly 100 flights as soaring jet fuel costs take a toll on the struggling flag carrier, deepening the fallout on the aviation sector from the US-Israeli war on Iran.
CEO Cites Unprofitability
CEO Campbell Wilson said the airline had already reduced overseas operations for May as increasing fuel costs and airspace restrictions in India’s neighbourhood were making its overseas routes way too expensive to operate. Given the situation appeared unlikely to improve, especially as the closure of the Strait of Hormuz continued to disrupt fuel supplies, the airline was making additional cuts for June and July.
“We have reduced some flying for April and May,” the CEO noted in a message to staff. “Massive rise in jet fuel prices, which together with airspace closures and longer flying routes, have caused many of our international flights to become unprofitable to operate.”
Industry-Wide Strain
His statement came days after leading Indian airlines warned that the aviation sector was under grave financial strain due to rising fuel prices and continued airspace restrictions. “The airline industry in India is under extreme stress and is on the verge of closing down or of stopping its operations,” the Federation of Indian Airlines said in a letter to the government.
India imports nearly 88 per cent of its crude oil, making it particularly vulnerable to global price shocks. The fuel crisis triggered by the conflict in the Middle East is affecting other countries as well. Just last week, United Airlines and Lufthansa became the latest airlines to consider flight cancellations or fare hikes as fuel prices spiked.
Flight Reductions and Financial Impact
Air India is reducing flights to Europe, North America, Australia, and Singapore in June, the Economic Times reported. Mr Wilson said that Air India was already running into losses and, so, it had little choice but to reduce schedules until July. Jet fuel alone accounts for nearly 40 per cent of an airline’s operating costs.
“We very much regret the disruption to our customers’ plans and to our crew’s rosters, and hope that the Middle East situation settles – and the Strait of Hormuz opens – soon so that we can get back to a more normal state,” he said.
Leadership Transition and Losses
Mr Wilson is set to step down as CEO later this year. Air India is looking for his successor at a time when it’s facing mounting losses. The airline, owned by the Tata Group, was forecast to take a hit of $600m a year because of Pakistan’s airspace ban on Indian flights that came into effect in April 2025, Reuters reported. The airline, which was sold by the Indian government in 2022, reported a loss of $433m last year.
