The correspondence underscores the increasing financial strain in the world’s fastest-growing aviation market, where airlines have already faced significant challenges, compounded by a Pakistani airspace ban for international flights due to diplomatic conflicts, even before the Iran crisis.
In December, massive flight cancellations by IndiGo due to operational troubles led authorities to impose fare limits based on distance, capping at 18,000 rupees ($192.04) for a one-way flight.
Although the situation has improved, the fare caps remain in effect without a specified timeline for removal. Indian airlines are experiencing substantial revenue losses and elevated operational costs, partially attributed to a spike in jet fuel prices resulting from the conflict in Iran, according to the Federation of Indian Airlines in a private letter to the government dated March 12, which was reviewed by Reuters.
“If the current conditions persist, airlines are likely to experience severe financial hardships, pushing several carriers towards untenable financial situations and potentially jeopardizing their long-term viability,” the March 12 letter, which was not made public, stated.Also read: Air India to operate 50 flights on March 18 to West Asia amid regional conflict
The civil aviation ministry and the FIA did not respond to requests for comments. IndiGo and Air India, which together dominate over 90% of India’s domestic air traffic, also did not offer any comments. A spokesperson for SpiceJet likewise did not reply to an inquiry for feedback.
HSBC analysts noted that a $1 change in fuel prices could affect IndiGo’s total annual fuel expenses by approximately 3 billion rupees. Jet fuel prices have surged recently due to the ongoing situation in the Middle East.
Additionally, IndiGo and Air India are forced to take longer flight paths to reach destinations in Europe and North America due to airspace limitations.
Also read: US-Israel war on Iran: Akasa Air resumes select flights to and from Riyadh and Mumbai
In a separate letter sent on Thursday, the FIA also called on the government to retract a directive requiring that a minimum of 60% of seats on every flight be available without extra fees for seat selection, warning that this could lead to increased ticket prices.
($1 = 93.7320 Indian rupees)
