Air India cuts flights as West Asia conflict drives up costs, fuel prices and dampens demand
Air India is reducing weekly flights and tightening spending as the West Asia conflict drives up fuel costs, increases flying time and weakens passenger demand, according to media reports. The airline is also facing pressure from a weaker rupee and rising operating expenses.
TATA Group-owned Air India has started reducing flights and tightening spending as the ongoing conflict in West Asia drives up operational costs and weakens travel demand, according to a report in The Times of India on Wednesday.
The report said the airline has already cut 90 flights in May and plans to cut nearly 100 flights between June and August, affecting several international routes, particularly long-haul services. Rising fuel prices and restricted airspace have made many routes financially unviable, said the report.
Escalating geopolitical tensions have forced airlines worldwide to reroute flights, increasing flying times, fuel consumption and crew costs. For Indian carriers such as Air India, the pressure has been particularly sharp as international operations form a major part of their network expansion strategy.
Rising fuel costs and weaker demand add pressure on operations
According to the TOI report, Air India operates nearly 1,200 flights daily and has been grappling with significantly higher aviation turbine fuel costs alongside a weakening rupee, both of which have inflated operating expenses.
The airline reportedly closed FY26 with losses of more than ₹22,000 crore, leading the management to explore broader cost-control measures. These include lower performance-linked bonuses, tighter control on discretionary spending and a closer review of operational efficiency.
The report said demand across some international routes has softened as passengers delay or reconsider travel plans amid rising ticket prices and uncertainty linked to the conflict. Industry executives cited by TOI said the combination of high fuel prices, volatile currency movements and geopolitical risks has created a difficult operating environment for airlines globally.
Air India has been in the middle of a large-scale transformation programme since its takeover by the Tata Group in 2022. The airline has placed record aircraft orders, expanded international connectivity and upgraded fleet and cabin services as part of its turnaround strategy. However, the fresh challenges arising from the West Asia crisis are now adding pressure on profitability and operations, the report said.
The airline has not officially detailed the full scale of the proposed cuts so far.
