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The Middle East crisis may impact India\u2019s aviation sector, especially westbound long-haul routes. Airspace restrictions are forcing rerouting, adding 35\u201370 minutes per flight and increasing fuel burn by 1.3\u20131.9 tonnes, driving up costs. With the region handling ~10% of global passenger traffic, disruptions are weakening India\u2019s international connectivity.<\/p>\n
Bhavana Yerrumreddy, Partner, Aviation, EY India<\/p>\n<\/div>\n
<\/p>\nGo First\u2019s collapse and the fear factor for lessors<\/h3>\n<\/p>\n
Go First\u2019s collapse in May 2023 was not just another airline shutdown, it became a major warning sign for India\u2019s aviation sector. When the airline filed for insolvency, global aircraft lessors were caught in a legal mess between India\u2019s insolvency laws and international leasing rules, making it difficult for them to take back their planes.Go First collapsed in 2023 after engine failures grounded a large part of its fleet, already having half of its fleet grounded due to Pratt & Whitney engine issues. Go First said its troubles stemmed not from financial mismanagement, but from persistent engine failures. In its bankruptcy filings, the airline said it did not miss a single debt repayment deadline.Instead, it squarely blamed US engine manufacturer Pratt & Whitney, alleging that the growing number of faulty engines supplied by the company forced it to ground a large portion of its fleet, triggering a major cash flow crisis.The industry has seen similar collapses before.Kingfisher Airlines fell in 2012 after expanding too fast and taking on huge debt. It tried to offer luxury flying at prices that did not make business sense, and its debt crossed Rs 9,000 crore.Jet Airways, once one of India\u2019s biggest airlines, shut down in 2019 after years of financial trouble. It struggled to cut costs while the market shifted towards cheaper, low-cost airlines, and eventually ran out of money.Meanwhile, SpiceJet is still flying, but it remains under constant financial pressure. The airline continues to battle cash crunches, legal disputes with lessors, and grounded aircraft due to unpaid dues and maintenance problems.<\/p>\nOperation Sindoor impact<\/h3>\n<\/p>\n
If Covid destroyed balance sheets, Operation Sindoor changed airline maps.On May 7, 2025, India attacked terror sites in Pakistan, after the Pahalgham attack. In response, Pakistan declared a total Pakistani airspace closure for Indian carriers.It became one of the biggest operational cost shocks Indian aviation had faced in years.Flights from northern India to Europe, North America, and western destinations suddenly had to avoid Pakistani airspace entirely. <\/p>\n\n
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This forced airlines onto the \u201cLong Way Round\u201d: South over Mumbai and the Arabian Sea before turning west.The impact was immediate:<\/p>\n\n
\n- Extra flight hours on some routes<\/li>\n
- Additional fuel burn<\/li>\n
- Higher crew costs<\/li>\n
- Reduced aircraft utilisation<\/li>\n
- More maintenance stress<\/li>\n
- Longer turnaround times<\/li>\n<\/ul>\n<\/div>\n
For some routes, technical halts became necessary.At the same time, airports across northern India, including Srinagar, Leh, and Amritsar, faced civilian disruptions, wiping out key parts of the lucrative 2025 summer season.As the airspace continued to be disrupted, Air India, forecasted a hit of $600 million a year, according to Reuters.<\/p>\n2025: The darkest blow<\/h3>\n<\/p>\n
<\/p>\nThe Air India crash<\/h4>\n<\/p>\n
On June 12, 2025, the aviation industry suffered a blow far deeper than financial loss. Air India Flight 171, a Boeing 787 Dreamliner, crashed just 32 seconds after taking off from Ahmedabad, slamming into a medical college hostel.The devastation was immense, 260 lives were lost, making it the deadliest aviation disaster of the decade. <\/p>\n\n
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Beyond the unimaginable human tragedy, the crash shook the entire aviation sector. Regulatory scrutiny intensified, safety checks expanded, and airlines came under much greater operational pressure. Insurance premiums reportedly surged by 400%, adding to the financial strain.Passenger confidence weakened, and Air India\u2019s already challenging transformation journey became even more difficult.For Air India, already balancing:<\/p>\n\n
\n- Fleet modernisation<\/li>\n
- Brand rebuilding<\/li>\n
- Global expansion<\/li>\n
- Operational integration<\/li>\n<\/ul>\n<\/div>\n
The crash created reputational and economic damage.<\/p>\nIndiGo\u2019s December meltdown: Even the strongest player cracked<\/h4>\n<\/p>\n
For years, IndiGo had been the pillar of Indian aviation.Its dominance, around two-thirds of domestic market share, made it appear almost too big to fail. But in December 2025, that assumption was shattered.A major Flight Duty Time Limitation (FDTL) scheduling crisis, pilot shortages, and inadequate staffing buffers triggered one of the largest operational meltdowns in modern Indian aviation.The scale of disruption was staggering. More than 5,000 flights were cancelled in just two weeks, affecting around 9.8 lakh passengers and throwing wedding plans, holidays, and travel schedules across the country into chaos. <\/p>\n\n
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Compensation payouts alone touched Rs 22.76 crore in a single month as cancellation rates spiked sharply.But the bigger warning went beyond the immediate disruption, it exposed how dangerously dependent India\u2019s aviation ecosystem had become on one airline. When IndiGo faltered, the entire domestic network felt the shock. Fare surges, capacity shortages, and widespread instability spread across the country, proving that rapid expansion without strong operational resilience had turned into a systemic risk.All these numbers were building up for an even steeper shock \u2014 the Middle East hit.<\/p>\nAnother blow: The Middle East war and fuel shock<\/h3>\n<\/p>\n
Just when airlines were trying to recover from debt, grounded planes, crashes, and airspace chaos, 2026 brought an even bigger storm. <\/p>\n\n
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It all began on the ground before hitting the skies. After US-Israel strikes on Iran on February 28, tensions around the Strait of Hormuz, the route for nearly 20% of global oil supplies, sent crude prices soaring.For airlines, that was bad news almost instantly. Fuel, which already makes up 30\u201340% of operating costs, became far more expensive. ATF prices rose 5.7% in March, while Brent crude jumped from $72 to $105 per barrel. Add a weaker rupee, which makes dollar-based costs like leases and maintenance even pricier, and the pressure only grew. <\/p>\n\n
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<\/p>\nKey changes hitting flyers<\/h4>\n<\/p>\n
<\/p>\n\n
\n- Fuel surcharges
Airlines have started directly passing on rising ATF costs to passengers. IndiGo has introduced a fuel surcharge<\/keyword> ranging from Rs 425 to Rs 2,300 on domestic and international tickets. Air India and Air India Express have added a Rs 399 fuel surcharge on domestic tickets from March 12. Akasa Air has introduced fuel surcharges ranging from Rs 199 to Rs 1,300 on domestic and international flights.<\/li>\n- 29 international Air India routes affected:
Air India will suspend or reduce frequencies on 29 international routes between June and August 2026.<\/li>\n - How Air India\u2019s flights look
On domestic and short international flights (under 2 hours), meals may soon be unbundled from ticket prices. Flyers who skip meals could save over Rs 250 on their ticket. Air India is considering unbundling lounge access, allowing some business travellers to pay less if they do not use lounges.<\/li>\n<\/ul>\n<\/div>\n\n
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ICRA now expects India\u2019s aviation losses to widen to Rs 17,000\u201318,000 crore in FY2026, with its outlook downgraded from stable to negative.The fallout may not stop with airlines. Slower passenger growth, rising airfares, and fuel surcharges could mean travellers will continue to pay more too.<\/p>\nCentre steps in to support<\/h3>\n<\/p>\n
Air India, IndiGo, and SpiceJet had urged the government to revise ATF pricing and provide financial relief, warning that soaring fuel costs and liquidity stress are pushing the aviation industry towards an operational crisis.Federation of Indian Airlines (FIA), which represented the three airlines, sounded urgent alarm in an SOS to the government, \u201cThe Indian airline industry is under extreme stress and dangerously close to shutting down operations.\u201dIn response, the government launched ECLGS 5.0, setting aside Rs 5,000 crore for airlines through government-backed loans of up to Rs 1,500 crore per borrower.The scheme offers a 7-year tenure and a 2-year moratorium to ease cash flow pressure, support jobs, maintain operations, and help airlines manage rising fuel costs, airspace disruptions, and financial strain.<\/p>\nThe bottom line<\/h3>\n<\/p>\n
As rising fuel costs, route disruptions, and airspace restrictions continue to shake the aviation sector, industry experts say the Middle East crisis could have deeper consequences for India\u2019s long-term global connectivity. <\/p>\n\n
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Bhavana Yerrumreddy, partner, aviation at EY India, said the crisis is putting significant pressure on India\u2019s aviation sector, especially on westbound long-haul routes.With airspace restrictions forcing airlines to reroute, flights are becoming 35 to 70 minutes longer, increasing fuel burn by 1.3 to 1.9 tonnes per flight and sharply pushing up costs.She noted that with the Middle East handling nearly 10 per cent of global passenger traffic, these disruptions are also weakening India\u2019s international connectivity.According to Yerrumreddy, \u201cIndian airlines are already facing Rs 12\u201318 crore in additional monthly costs, while ATF now accounts for 55\u201360% of operating expenses, up from ~40%. Cargo demand has also softened, with a 4.8% YoY decline, and capacity disruptions peaked at 73%, near pandemic levels. While operations may stabilise in weeks, financial recovery could take one to three quarters.\u201dWhile flight operations may stabilise within weeks, she said the financial recovery could take one to three quarters.In the longer run, however, the disruption may also force a strategic reset. Yerrumreddy said the crisis is accelerating a shift towards more resilient direct routes, diversified hubs, and flexible aviation networks.With the right policy backing and infrastructure push, India could reduce its reliance on Gulf hubs and emerge stronger as a global aviation hub.Until then, however, Indian aviation remains stuck in a perfect storm where every global disruption, from wars to oil shocks, is now directly reflected in the price of a boarding pass.<\/div>\n
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Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Yatrigan, fasten your seatbelts for not just your flight but the whole aviation sector is experiencing turbulence!Flight delays, rising ticket prices, and cancelled international routes are no longer breaking news, but the new normal. In May 2026, airlines are grappling with a mix of economic and geopolitical pressures, creating a cycle of challenges that keeps…<\/p>\n","protected":false},"author":1,"featured_media":15939,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[],"class_list":["post-15938","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/saharanews.in\/index.php?rest_route=\/wp\/v2\/posts\/15938","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/saharanews.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/saharanews.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/saharanews.in\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/saharanews.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15938"}],"version-history":[{"count":0,"href":"https:\/\/saharanews.in\/index.php?rest_route=\/wp\/v2\/posts\/15938\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/saharanews.in\/index.php?rest_route=\/wp\/v2\/media\/15939"}],"wp:attachment":[{"href":"https:\/\/saharanews.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15938"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/saharanews.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15938"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/saharanews.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15938"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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