New Delhi: The impact of the US-Iran war is not only having a serious impact on the global energy market, but also on the Indian aviation sector.
In the wake of a sharp increase in the price of aviation turbine fuel (ATF), the country’s leading airlines, Air India and IndiGo, have decided to reduce domestic flight services for the next three months from June 1.
Sources said that the two companies, which have a share of more than 90 percent of the domestic aviation market, have decided to reduce operations due to falling passenger demand and rising fuel costs.
It is learned that Air India will reduce its domestic flight operations by about 15 percent, while IndiGo is preparing to suspend 5 to 7 percent of its services.
About 40 percent of the total operating costs of airlines are due to the price of ATF. After the war, the price of ATF has increased from Rs. 80 thousand to more than Rs. 1 lakh per kiloliter, Air India sources said. Officials said that fuel costs have also increased due to different VAT rates in different states.
Air India, which has already announced cuts in international flight services, is reportedly planning to reduce the number of flights on some major routes, although it will not cancel any routes completely.
Services from Mumbai to Ahmedabad, Nagpur, Patna and Bhopal will be reduced, and the number of flights from Delhi to Hyderabad, Bengaluru and Kolkata will also be reduced.
This will also affect South India, and return flights on these routes will also be reduced, sources said.
Airlines have estimated that the reduction in international services will also reduce demand for domestic connecting flights.
It is said that the number of passengers connecting to Delhi and Mumbai is likely to decrease.
The cuts will be in effect from June 1 to the end of August, and sources said that some services have already been removed from the website to prevent passengers from booking tickets.
Meanwhile, IndiGo officials said that the usual drop in passenger numbers after the school holidays is another reason.
For an airline that operates around 1,950 flights daily, even a small reduction could lead to a large number of flight cancellations, they said.
To help the aviation sector, the central government had capped the ATF rate hike for domestic airlines at 25 percent from April 1, 2026. It had also announced a reduction in parking fees and emergency loan schemes.
Meanwhile, the Delhi government has reduced the VAT on ATF from 25 percent to 7 percent, while the Maharashtra government has also reduced it from 18 percent to 7 percent.