India's two largest airlines are implementing significant capacity cuts as soaring fuel costs and softer travel demand reshape the aviation landscape. According to reports from PTI, the combined reductions could result in around 250 flights being withdrawn daily during the June-August period. IndiGo, the country's largest airline, is planning to reduce domestic flights by 5-7% while cutting international services by approximately 17%. Air India, the Tata Group-owned carrier, has announced temporary reductions of 20-22% of its domestic flights, translating to more than 790 domestic services being withdrawn weekly. Air India Express, a subsidiary of Air India Limited, is cutting nearly 10% of its roughly 340 daily domestic flights. The reduction comes during a busy holiday season when many families travel for vacations, with fewer flights on key routes potentially leading to crowded schedules and higher ticket prices across major cities.
The flight cuts come as aviation turbine fuel (ATF) prices have surged dramatically, with prices climbing from around ₹80,000 to more than ₹100,000 in several Indian cities. As reported by PTI, industry estimates suggest fuel expenses for domestic flights have risen by around 25%, while international routes have seen even sharper increases. Airlines have already increased fares on several routes and introduced fuel surcharges of ₹400-450 per passenger due to higher ATF costs. The main reason behind the cuts is the sharp rise in aviation turbine fuel prices, with fuel costs for domestic operations increasing significantly in recent weeks, adding pressure on airline operating expenses. Industry executives have also pointed to softer demand after the peak summer travel period as a key factor for the capacity reductions.
India's state-owned oil refiners have provided crucial relief to the aviation industry by maintaining stable fuel prices following airline pleas for support. According to Business Standard, jet fuel prices for domestic flights will remain unchanged at ₹104,927 ($1,104.25) per kiloliter in New Delhi for June. This represents a significant development as refiners had previously raised ATF costs by 8.6% in April and were required to maintain constant prices in May. The government's intervention comes as airlines face mounting pressure from the Iran war fallout and depressed demand in the world's third-largest domestic aviation market. Indian Oil Corp. and Bharat Petroleum Corp. have also provided additional relief by reducing jet fuel prices for international flights, though specific details of the cuts were not immediately available.
Aviation Turbine Fuel (ATF) prices for international airlines have received significant relief, with rates being cut by about 27% from June 1, bringing rates down to around USD 1,100 per kiloliter. This substantial reduction provides crucial cost relief to international carriers operating in the Indian market. The price cut comes as global jet fuel costs have eased, providing much-needed respite to airlines that had been struggling with soaring fuel expenses. The reduction in international ATF prices is expected to help airlines restore some of their international operations and improve route profitability, potentially leading to more competitive pricing and better connectivity for passengers.
The challenging operating environment is reflected in Air India's financial performance, with the airline reporting a loss of more than SGD 3.56 billion (over ₹26,700 crore) for the financial year ended March 2026, according to figures disclosed by Singapore Airlines Group in its annual financial report for 2025-26. Singapore Airlines Group, which owns a 25.1% stake in Air India, said its own net profit fell 57% to SGD 1.184 billion (nearly ₹8,900 crore), partly due to Air India's losses. Air India operates approximately 4,400 weekly flights, including around 3,600 domestic services and 800 international flights. The airline's 22% reduction during June and July means roughly 110 fewer flights daily from its nearly 500 domestic flights per day. IndiGo, which runs around 2,200 daily flights, is trimming its domestic capacity by 5-7%, resulting in about 110 fewer flights per day. Air India Express is cutting nearly 10% of its roughly 340 daily domestic flights. Airlines are expected to restore flights once fuel prices stabilise and travel demand improves, with the reductions being temporary and driven by high fuel prices.
