May 27 (Reuters) – IndiGo and Air India, India’s two largest airlines, have sharply cut their planned domestic flights for June and July, sources familiar with the matter said, as the industry grapples with a rise in jet fuel costs in the wake of the Iran war.
IndiGo has cut around 7%-10% of its planned domestic flights for the period, while Air India has cut 22%, the sources said, marking a significant pullback by the two carriers that together control around 90% of India’s domestic air passenger market.
The sources declined to be named as they were not authorised to share the information.
The cuts could tighten seat availability on some domestic routes and keep fares elevated during the busy summer travel period, even as airlines try to avoid flying loss-making services.
The Iran war-driven surge in jet fuel prices has blindsided the aviation industry. Fuel can account for up to 40% of airlines’ operating expenses, forcing them to raise fares and cut unprofitable flights.
Air India said in a statement that it had “temporarily rationalised operations on certain domestic routes” between June and August.
“These adjustments are driven by the sustained impact of high fuel prices on overall operations. Air India will continue to monitor demand and operating conditions closely, with a view to restoring frequencies as conditions stabilise,” a spokesperson for the airline added.
Passengers affected by the changes would be offered places on alternative flights, complimentary date changes or full refunds, the spokesperson added.
IndiGo did not immediately respond to an emailed request for comment. The airline operates over 2,200 daily flights, including international.
Air India’s cuts follow reductions to its international routes, which have created room for foreign airlines to add more flights to and from India. IndiGo had cut some long-haul flights prior to the war, citing operational constraints and airport congestion.
The reductions also underscore the vulnerability of India’s fast-growing aviation market to external shocks, even as carriers are set to receive new jets in the coming years.
Air India recently logged a record annual loss of more than $2 billion, also battered by Pakistan’s ban on Indian carriers from its airspace and a strong U.S. dollar. The airline is owned by the Tata Group and Singapore Airlines.
