Air India to Cut Nearly 100 Flights Through July Due to Rising Fuel Costs and Airspace Restrictions

Air India is set to cut down almost 100 of its domestic and international flights till July as rising jet fuel prices and airspace restrictions make several overseas routes too expensive to run, deepening the crisis for the already loss-making airline.

Air India CEO and managing director Campbell Wilson told employees on Friday that the company had already reduced certain overseas operations in April and May, but worsening conditions mean additional cuts will now extend into June and July. "We have reduced some flying for April and May...massive rise in jet fuel prices which, together with airspace closures and longer flying routes, have caused many of our international flights to become unprofitable to operate," Wilson said in his message to staff.

The company that operates nearly 1,100 flights on a day to day basis will cut down operations to Europe, North America, Australia and Singapore in June. Airspace curbs caused by the conflict have forced the airline to divert flights on several international sectors, increasing journey times and fuel burn. Wilson said that the combination of these factors has created an extremely difficult operating environment for the loss-making airline. He said there was now little alternative but to reduce schedules further through July.

"We very much regret the disruption to our customers' plans and our crew's rosters, and hope that the Middle East situation settles - and the Strait of Hormuz opens - soon so that we can get back to a more normal state," he said. Wilson has already announced that he will step down later this year. Air India Group is estimated to have posted losses exceeding Rs 22,000 crore for the financial year ending March 31, 2026, highlighting the scale of pressure on its business as global fuel markets remain volatile.

Air India’s crisis is unfolding alongside a wider oil price shock that is also putting heavy pressure on India’s state-run oil marketing companies. Global average jet fuel prices surged to $179.46 a barrel in the week ended April 24, an 80% jump from $99.40 at the end of February. Crude prices also crossed $126 a barrel on Thursday after US President Donald Trump signalled an extended naval blockade of Iran, raising fears of prolonged disruption in the Strait of Hormuz.

Since the Gulf war began on February 28, fuel benchmarks have surged sharply. Average diesel prices in April were 119% higher than in February, petrol rose 69%, LPG climbed over 40%, and aviation turbine fuel prices doubled. The sharp jump in crude has widened losses for oil companies dealing with rising costs across petrol, diesel, aviation turbine fuel and LPG. Following the conclusion of voting in several states, oil marketing companies are pushing for a quicker increase in domestic fuel prices, according to people familiar with the matter, as they seek to pass on higher global costs.

Despite that pressure, the government is seen as reluctant to immediately approve price increases. “International prices have been volatile and have risen steeply, but it has been the government’s effort to ensure that consumers face the least problem--that’s why our prices are stable,” Sujata Sharma, joint secretary in the ministry of petroleum and natural gas, said on Thursday. “The impact on (oil marketing companies) will be known with time.” Earlier in the week, Sharma had also said there was no proposal to raise fuel prices from May 1. People aware of the discussions said that oil companies may ultimately require either retail price hikes or government compensation if elevated crude prices persist.