Air India scales back international operations between May and July

Air India has decided to scale back its international operations between May and July as surging aviation fuel prices and restricted airspace continue to erode profitability, according to industry sources and company communication.

The airline plans to reduce services to key regions including Europe, North America, Australia and Singapore from June, as longer flight routes—caused by airspace restrictions linked to the ongoing West Asia conflict—have significantly increased fuel consumption.

In a message to employees, outgoing chief executive and managing director Campbell Wilson said several international routes had become financially unviable under current conditions.

“A massive rise in jet fuel prices, together with airspace closures and longer flying routes, has caused many of our international flights to become unprofitable to operate,” he noted, adding that the situation remains “extremely challenging”.

Wilson said the airline had already reduced some services in April and May and would be forced to trim schedules further in the coming months. While domestic operations have also been affected, the impact has been comparatively lower due to limits placed on domestic fuel price increases.

Air India Group is estimated to have incurred losses of over Rs 22,000 crore in the financial year ending 31 March 2026, reflecting the mounting pressure on the aviation sector.

The airline has attempted to offset rising costs by increasing fares and imposing fuel surcharges. However, Wilson acknowledged that higher ticket prices have dampened demand. “We can only raise fares so much before passengers choose not to travel,” he said.

The move comes days after the Federation of Indian Airlines (FIA) flagged concerns to the Ministry of Civil Aviation, warning that current fuel prices are pushing airlines towards unsustainable operations. In a recent communication, the industry body said aviation turbine fuel (ATF) prices for international flights had risen by around Rs 73 per litre.

The FIA cautioned that the sector is under “extreme stress”, exacerbated by the West Asia conflict and steep fuel price increases. It noted that ATF, which typically accounts for 30–40 per cent of an airline’s costs, now makes up as much as 55–60 per cent of total operating expenses.

Industry analysts say that unless fuel prices stabilise or operational constraints ease, airlines may be forced to further rationalise routes, potentially impacting connectivity and passenger traffic in the coming months.