Air India has cut international flight schedules and warned of further reductions through June and July, as a surge in jet fuel prices, airspace restrictions and longer flying routes render several operations unviable, Chief Executive Officer Campbell Wilson indicated in a communication to staff.
The curtailment affects services across key long-haul sectors, including Europe, North America, Australia and Singapore, as the airline grapples with escalating operating costs and persistent geopolitical disruptions, particularly in West Asia.
Flagging immediate challenges, Wilson noted that the airline had already reduced some flying in April and May. “A massive rise in jet fuel prices, together with airspace closures and longer flying routes, has caused many of our international flights to become unprofitable to operate,” he said.
The situation, he added, remains “extremely challenging”. “The airspace and jet fuel price situation remains extremely challenging, leaving us no choice but to further trim schedules for June and July,” Wilson said, signalling additional capacity cuts in the coming weeks.
Airspace restrictions linked to the ongoing West Asia tensions have forced airlines to adopt longer routes, significantly increasing fuel burn and flight times. This has compounded the impact of sharply rising aviation turbine fuel (ATF) prices, which now account for a larger share of operating expenses.
While domestic operations have also been affected, the impact has been comparatively limited. “The profitability of domestic flights has also been significantly affected, but to a lower degree thanks to the government's limitation of the domestic fuel price rise to 25%,” Wilson said.
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Attempts to offset rising costs through fare increases and fuel surcharges have offered limited relief. “We have increased airfares and imposed fuel surcharges but... these higher airfares impact customer demand, so we can only raise fares so far before people decide to stay home,” he added.
The airline also pointed to broader geopolitical uncertainties, particularly disruptions around the Strait of Hormuz. Wilson expressed hope that “the Middle East situation settles - and the Strait of Hormuz opens - soon so that we can get back to a more normal state.”
Despite near-term pressures, Air India said it remains committed to its long-term transformation strategy. This includes fleet modernisation, improvements in onboard services, and enhanced customer experience initiatives.
On the network front, the airline has secured government approval to roll out a hub-and-spoke model aimed at streamlining passenger movement. The system will allow travellers from Tier 2 and Tier 3 cities to complete immigration and customs formalities at their origin airports before transiting through designated hubs such as Delhi and Mumbai.
Wilson said the initiative would enable “domestic passengers from Tier 2 and Tier 3 cities to undergo immigration and customs clearance at their origin station and enjoy an easier transit experience”.
The airline also highlighted ongoing partnerships and efforts to expand international connectivity, even as it recalibrates capacity in response to cost pressures and operational constraints.
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