The correspondence emphasizes the increasing financial strain within the world’s fastest-growing aviation market, where airlines were already grappling with challenges, such as the Pakistani airspace ban for international flights stemming from diplomatic tensions prior to the Iran crisis.
In December, widespread flight disruptions caused by mass cancellations from IndiGo due to operational issues led authorities to impose fare caps based on distance, with a maximum of 18,000 rupees ($192.04) for one-way tickets.
Although the crisis has subsided, the fare caps remain in effect with no clear end date. The Federation of Indian Airlines noted in a private letter to the government on March 12, as reported by Reuters, that domestic airlines are suffering from significant revenue losses and are facing elevated operational costs, partly due to rising jet fuel prices linked to the Iran conflict.
“If the current conditions persist, airlines will endure severe financial setbacks, pushing some operators towards untenable financial states and potentially jeopardizing their viability,” stated the March 12 letter, which remains undisclosed. Also read: Air India to operate 50 flights on March 18 to West Asia amid regional conflict
The civil aviation ministry and the FIA did not provide comments. IndiGo and Air India, which dominate more than 90% of India’s domestic market, also did not reply. A spokesperson for SpiceJet declined to comment.
HSBC analysts estimated that a $1 increase in fuel prices could raise IndiGo’s annual fuel costs by approximately 3 billion rupees. Recent rises in jet fuel prices have been attributed to the situation in the Middle East.
IndiGo and Air India are additionally taking longer routes to reach destinations in Europe and North America because of airspace limitations.
Also read: US-Israel war on Iran: Akasa Air resumes select flights to and from Riyadh and Mumbai
In a separate letter sent on Thursday, the FIA also urged the government to retract a directive requiring that a minimum of 60% of seats on any flight be available without extra charges for seat selection, arguing that it could result in higher fares.
($1 = 93.7320 Indian rupees)
