Fuel price surge forces Air India to cut up to 100 daily flights across global network

Air India is preparing to cut up to 100 flights a day across its domestic and international network as a sharp rise in jet fuel prices erodes airline margins and threatens route viability.

The move comes as global crude prices remain elevated following the onset of the US–Iran conflict, with benchmark Brent crude rising to $125 per barrel, its highest level since 2022. Industry executives say the sustained rally has pushed operating economics for several routes into unviable territory.

According to reporting by Outlook Business and The Economic Times, the airline, which operates nearly 1,100 flights daily, is expected to reduce services beginning June, with sharper cuts on long-haul routes.

Cost pressures intensify across aviation

Airlines have flagged that the surge in aviation turbine fuel prices is now the single biggest pressure point for the sector. Industry body Federation of Indian Airlines has written to the Ministry of Civil Aviation warning that the situation has turned “dire”.

The body, which represents major carriers including IndiGo, Air India and SpiceJet, highlighted both fuel inflation and operational disruptions such as longer flight paths as key concerns. It warned that airlines may be forced to reduce capacity if costs continue to rise.

Key stress indicators across the sector:

• Jet fuel prices have doubled since March
• Global average jet fuel prices reached $179.46 per barrel for the week ended April 24, up from $99.40 at the end of February
• Brent crude has climbed to $125 per barrel, driven by geopolitical tensions
• Oil marketing companies are expected to revise jet fuel prices again, adding to uncertainty

While the government rolled back a steep domestic jet fuel price increase earlier in April, no comparable relief has been extended to international operations, where costs remain elevated.

Network cuts likely to hit long-haul routes

Air India is expected to scale back flights to Europe, North America, Australia and Singapore, where fuel costs account for a significant portion of operating expenses.

The pressure is particularly acute on international routes, where longer flight durations and higher fuel burn amplify cost increases. According to The Economic Times, some North American services are already operating with technical stopovers in cities such as Vienna and Stockholm.

These adjustments reflect a broader shift in network planning, with airlines prioritising routes that can sustain current cost structures.

Airspace constraints add to cost burden

The closure of Pakistani airspace has further complicated operations for Indian carriers, forcing flights bound for Europe and North America to take longer routes.

This has resulted in:

• Higher fuel consumption due to extended flight times
• Increased crew costs
• Reduced aircraft utilisation efficiency

Air India has been more exposed to these pressures than its domestic-focused peers due to its larger international network, according to industry assessments cited in Outlook Business.

Profitability under strain

Airlines say that rising fuel costs are now outpacing revenue recovery, particularly on long-haul routes where pricing power remains limited.

A senior Air India official told The Economic Times that the airline is “not recovering even the operating cost on most flights”, warning that sustained increases in fuel prices could force deeper cuts.

The airline is also contending with reported losses exceeding Rs 20,000 crore, adding urgency to cost-control measures and network rationalisation.

The Federation of Indian Airlines has urged the government to intervene, warning that the sector is under “extreme stress”. Industry executives argue that without relief on fuel pricing or taxes, airlines may have limited room to absorb further shocks.

With another round of jet fuel price revisions imminent, airlines are bracing for continued volatility.

The trajectory of crude oil prices will be critical in determining how deeply airlines cut capacity in the coming months. If fuel costs remain elevated, further reductions across the sector cannot be ruled out.

For Air India, the immediate focus is on stabilising operations and preserving cash, even if that means scaling back its global footprint. More broadly, the situation underscores the fragility of airline economics, where external shocks can quickly disrupt growth plans and reshape network strategies.