The West Asia war and Pakistan’s airspace closure have delivered a double blow to Indian aviation, creating an asymmetric crisis that has reshaped competitive dynamics. While foreign carriers navigated the turmoil with relative ease, Indian airlines faced severe operational and financial headwinds that forced widespread route suspensions and capacity cuts. The convergence of these geopolitical factors has exposed structural vulnerabilities in India’s international aviation ambitions, triggering a dramatic shift in market share that favors foreign competitors at the expense of domestic carriers.
This closure applies only to Indian-registered aircraft, leaving foreign carriers unconstrained. The result is a stark operational divergence. Indian carriers must take lengthy detours to reach West Asia, Europe, and North America, while foreign competitors continue using direct, efficient routes through Pakistani airspace. Singapore Airlines CEO Goh Choon Phong explicitly highlighted this disadvantage, noting that Air India’s inability to use Pakistani airspace for more than a year put the airline at a distinct competitive disadvantage against foreign carriers that continue to use the route.
The impact on flight times is dramatic. Delhi-Manchester flights now take over three hours longer. The Delhi-Tashkent route, previously just over two hours, stretches to more than five and a half hours. Air India’s US-bound flights face extensions of up to five hours. These detours increase fuel consumption by 30-35% on affected routes, at a time when jet fuel prices have surged more than 50% above pre-conflict levels. Indian carriers are seeing 40-50% higher block times due to the unavailability of Pakistani and some West Asian airspace, forcing some routes to become commercially unviable.
The combined effect of longer routes and higher fuel costs has severely strained profitability. Indian airlines face additional weekly expenses of ₹77 crore from airspace restrictions alone, translating to over ₹307 crore monthly. Route-specific costs tell the story: Middle East flights incur an extra ₹5 lakh per flight, Europe routes ₹22.5 lakh, and North America services ₹29 lakh. These additional costs come on top of already elevated fuel prices, which account for 35-40% of operating expenses under normal conditions and can rise to nearly 60% during extreme volatility.
Operating profits are expected to decline 10-15% in FY2027, falling to approximately ₹16,000-17,000 crore from ₹19,000 crore in the previous year. The industry net loss projection for FY2027 has been revised upward to ₹360-380 crore, more than triple earlier estimates. ICRA revised its outlook on Indian aviation to Negative, citing the weakening spread between revenue per available seat kilometre (RASK) and cost per available seat kilometre (CASK) due to hardening aviation turbine fuel prices and airspace disruptions. The rating agency has also revised downward its international air passenger traffic growth forecasts for Indian carriers to 0-3% from 8-10% earlier, reflecting the severe impact of the conflict.
The passenger data reveals the asymmetric impact clearly. Total international air passenger traffic to and from India fell 9.1% year-on-year in April-June 2026 to 1.72 crore. However, this decline was entirely driven by Indian carriers, whose combined international passenger numbers plummeted 26.6% to 64.2 lakh. Foreign airlines, in contrast, expanded their cumulative passenger base by 6% to 1.08 crore. This represents a shared shock producing an asymmetric outcome, transferring market share on India’s own international routes to airlines that could still fly the short way west.
Market share shifted dramatically.
IndiGo, the largest Indian carrier for international routes, saw a 15.4% decline to 33.4 lakh international flyers. Air India Express and SpiceJet, with heavy concentration in Gulf routes, suffered declines exceeding 50%. The pain was uneven across markets: UAE, Qatar, Kuwait, Bahrain and Iraq saw steep declines while Saudi Arabia and Oman proved more resilient, and non-conflict markets such as Egypt grew sharply with India-Egypt traffic more than doubling.
While most Indian airports logged drops in international traffic, Delhi Airport defied the trend. In May 2026, it recorded 71.66 lakh passengers, a 14.7% increase over the previous year. Domestic traffic grew 18.6%, serving as the primary buffer, while international traffic still managed 4.1% growth. This performance stands in contrast to concerns that the conflict would significantly impact international travel demand and airline operations.
Delhi’s resilience stems from its diversified traffic mix. Unlike Gulf hubs dependent on international transit, Delhi’s operations are heavily supported by domestic demand. The airport handled 1.9 million transfer passengers in May 2026, representing 27% of total traffic—up from 20% a year earlier. Foreign carriers like Lufthansa, Swiss, and British Airways added temporary capacity, further supporting international traffic. Delhi stands out in the GMR Airports portfolio for its diverse network, unlike Hyderabad, another GMR Airport, where there is high dependency on connectivity to the Gulf region.
In contrast, Hyderabad Airport, with high dependency on Gulf connectivity, saw an 8.6% drop in passenger traffic in May 2026, with air traffic movements declining 8.8% to 17,105. This differential performance highlights the importance of network diversity and domestic market strength in weathering geopolitical disruptions. Other airports like Chennai, Kolkata, and Ahmedabad also experienced capacity declines, with domestic capacity falling at the fastest rate in Hyderabad and Chennai by 13% compared to the previous year.
Indian airlines implemented drastic schedule adjustments in response to the crisis. At the peak of the disruption in February 2026, nearly 180 flights were cancelled across Indian carriers, including 72 from IndiGo and 31 from Air India. Air India announced comprehensive capacity reductions through August 2026, suspending services to Chicago, Newark, and Mumbai-New York JFK, while cutting frequencies on routes to San Francisco, Toronto, Paris, Copenhagen, Milan, Vienna, Zurich, Rome, and multiple Asian destinations including Shanghai, Singapore, Bangkok, and Kathmandu.
The government coordinated a calibrated response, with airlines planning to operate 58 flights on March 4, 2026, including 30 by IndiGo and 23 by Air India and Air India Express, to facilitate stranded passenger movement. Indian carriers progressively resumed long-haul and ultra long-haul operations through alternative routings that avoided restricted airspace. However, the operational complexity and cost implications of these detours have forced airlines to reassess the viability of certain routes.
Looking ahead, Indian carriers must build geopolitical resilience into their operating models. Key strategies include developing risk management frameworks with scenario planning, forming strategic alliances for operational flexibility, investing in digital transformation for real-time communication, and diversifying networks to reduce dependency on single geopolitical corridors. Industry data shows that airlines with comprehensive risk frameworks recover 25% faster from disruptions compared to those without such frameworks.
The crisis has exposed structural vulnerabilities in Indian aviation’s international ambitions. As the industry recognizes that geopolitics is evolving into a core design constraint that could also serve as a source of competitive advantage for resilient operators, those that embed flexibility, resilience, and diversification into their network planning will be better positioned to compete in an increasingly uncertain global environment. If geopolitical instability persists over the medium term, it could lead to structurally higher costs including fuel, insurance, and regulatory compliance expenses, fundamentally reshaping the economics of international aviation for Indian carriers.
