India’s leading carriers, Air India and IndiGo, are set to scale down their domestic flight operations starting June 1, as rising fuel costs and weakening demand begin to strain the aviation sector.
According to reports, both airlines will reduce capacity for a period of approximately three months, responding to a sharp surge in Aviation Turbine Fuel (ATF) prices and a seasonal dip in travel demand following the peak holiday period.
Air India is expected to cut up to 15% of its domestic operations, while IndiGo may reduce services by 5–7%, reflecting a broader industry recalibration aimed at maintaining financial viability.
Fuel costs driving decisions
ATF, which accounts for nearly 40% of an airline’s operating expenses, has seen a significant price increase in recent months. The spike is largely linked to global crude oil volatility, intensified by geopolitical tensions in West Asia, including the ongoing Iran conflict.
Airline executives have indicated that operating flights under current fuel price conditions is becoming increasingly unsustainable, prompting carriers to withdraw less profitable routes and optimise capacity.
Demand slowdown adds pressure
In addition to rising costs, airlines are also facing lower-than-expected demand during the summer period. With the end of school holidays, travel demand has softened, further impacting load factors and revenue generation.
The dual pressure of high operational costs and weak demand has forced airlines to reassess route profitability and temporarily reduce frequency across domestic networks.
Sector-wide implications
The move signals growing stress within India’s aviation sector, which has been grappling with cost pressures, currency fluctuations, and global supply disruptions. Industry experts warn that continued volatility in fuel prices could lead to further capacity cuts, fare increases, or structural adjustments in airline operations.
As the situation evolves, both airlines are expected to closely monitor fuel trends and demand patterns before restoring full capacity, highlighting the fragile balance between cost management and service continuity in India’s aviation market.
