New Delhi, May 28: The impact of rising fuel prices is now becoming evident in the domestic aviation sector. Due to the increase in the costs of petrol, diesel, and jet fuel, both Air India and Indigo have decided to reduce their domestic flight operations.
Indigo plans to cut its domestic flight capacity by 5-7 percent between June and August 2026. Following Air India, Indigo is the second major Indian airline to implement operational reductions. The airline has already reduced its international flight capacity by approximately 17 percent under a temporary schedule adjustment. This decision comes shortly after Air India announced a 22 percent reduction in its domestic flights during June and July.
Experts indicate that the sharp rise in aviation fuel prices is one of the key factors affecting airline operations. Jet fuel accounts for nearly a quarter of an airline’s operational costs, making them highly sensitive to fluctuations in crude oil prices.
The ongoing conflict in Iran has further increased uncertainty in global energy markets, leading to significant hikes in crude oil prices in recent months. India imports a large portion of its crude oil needs, which means domestic airlines are particularly affected by rising fuel costs. Additionally, the depreciation of the rupee has further burdened airlines with increased expenses.
Typically, a decline in passenger demand is observed after the peak summer holiday season. Analysts suggest that the combined effects of decreased demand and rising fuel costs have compelled airlines to readjust their capacity plans.
Earlier, Air India stated that it is struggling to reduce costs due to rising fuel prices amid the Middle East conflict, leading to a reduction in flights on certain domestic routes from June to August.
The Tata Group-owned airline mentioned in its statement that this decision follows its earlier choice to reduce some international services. It noted that, in line with previously announced adjustments for select international services, it has temporarily streamlined operations on certain domestic routes and reduced the number of flights on specific routes during this period.
Under pressure to mitigate losses, Air India is expected to cancel nearly 20 percent of its domestic flights, which will help decrease fuel consumption, accounting for about 40 percent of its operational costs.
–
Leave a Comment