- Air India CEO warns of flight cuts amid rising fuel prices and Iran-Israel conflict
- The airline canceled 2,500 Middle East flights, operating only 30% of usual schedule
- Fuel surcharges start at Rs 400 for domestic flights, impacting customer demand
Air India CEO Campbell Wilson has warned of possible flight cuts and stricter cost controls as fuel prices rise amid the US and Israel's war on Iran. In an internal memo dated March 20, reviewed by The Hindu, the Air India chief asked employees to maintain “tighter-than-ever” control on non-essential spending, citing higher turbine fuel costs and ongoing uncertainty.
He said the airline has cancelled around 2,500 flights to the region over the past three weeks and is currently operating only about 30% of its usual Middle East schedule due to closed airports and restricted airspace.
“Not Every Customer Is Willing To Pay Higher Airfares"
Wilson said rising aviation turbine fuel (ATF) costs have led to fuel surcharges, starting at about Rs 400 for domestic flights and higher for international routes, which could further hit demand.
“Not every customer is willing to pay higher airfares, so there is a limit to how high we can price before demand drops. Given the current climate, customers and companies may be less willing to travel than before the conflict and could choose to defer trips,” he said.
He also said the oil and energy crisis triggered by the war has already begun to impact airlines in parts of the world. “Depending on how fuel costs, airfares and customer demand move, we may also have to adjust,” he stated, pointing to Scandinavian Airlines, which operates 800 flights daily, and is cutting 1000 flights in April.
Also Read: How The Iran-Israel War Is Costing Middle East Tourism USD 600 Million A Day
Pockets Of New Demand
Campbell Wilson also mentioned that the airline's long-haul and ultra-long-haul flights to Europe and North America are now being rerouted along even longer paths than during the Pahalgam episode last April, “consuming more fuel and adding more time”.
Air India also sees “pockets of new demand,” particularly for non-stop services between India and Europe that bypass West Asia. Seizing the opportunity, they are operating 118 additional flights on these routes between March 10 and March 28.
In a Saturday press release, Air India and Air India Express said they will operate a total of 50 flights to and from West Asia on March 22. This includes both scheduled and additional non-scheduled services. The airlines said regular operations will continue on select routes such as Jeddah and Muscat, while several other Gulf destinations will be served through ad-hoc flights, subject to approvals and operational conditions.
