Airlines seek govt support as Iran war hits ops, raises pricing pressure

Airlines warn prolonged West Asia conflict could disrupt operations and raise costs as jet fuel prices surge, routes lengthen, and insurance premiums climb, prompting calls for regulatory relief

Civil Aviation Minister Kinjarapu Ram Mohan Naidu on Friday met commercial airline executives, who warned that a prolonged conflict in West Asia could significantly disrupt operations for Indian carriers due to their heavy exposure to the region, an Economic Times report said.

 

During the meeting, airline representatives are said to have urged the government to consider support measures if jet fuel prices climb further. Aviation turbine fuel typically accounts for around 15–25 per cent of an airline’s operating costs. Prices of jet fuel in Singapore, a key benchmark for Asia, have already jumped 72 per cent, reaching a record $225.44 a barrel on Wednesday amid concerns over supply disruptions.

   

Analysts at Citigroup told The Economic Times that benchmark Brent crude oil could trade between $80-$90 a barrel this week if the conflict continues.

 

Airline executives also sought rationalisation of airport charges and route navigation fees imposed by the Airports Authority of India (AAI).

 

The Centre, however, has not yet considered direct financial incentives for the aviation sector. Instead, authorities are exploring ways to ease regulatory hurdles for airlines operating flights to the conflict-stricken region.

 

Officials are reported to be considering options such as extending watch hours at western Indian airports and granting limited exemptions from the newly-implemented pilot duty hour rules for flights that have become longer due to diversions around conflict zones.

 

Indian carriers have already begun to face higher operating costs. Air India, owned by the Tata Group, has been forced to take longer routes for some services to Europe and North America due to a ban on Indian carriers using Pakistani airspace following last year’s Operation Sindoor, significantly increasing fuel consumption.

 

Air India is said to have requested the government to explore an alternative route over China to bypass the Pakistani ban. Such a proposal would require clearance from the ministries of home affairs and defence before any formal engagement with Beijing.

 

Meanwhile, IndiGo has been unable to deploy six leased wide-body aircraft for its planned European routes because the planes’ owner, Norse Atlantic Airways, must comply with restrictions imposed by the European Union Aviation Safety Agency on flying through West Asian airspace.

 

West Asian airports, especially in the UAE, Qatar, and Saudi Arabia, remain a critical transit corridor for Indian airlines travelling between Europe and Asia. Air India has a codeshare partnership with Emirates, etihad and Qatar Airways.

 

Insurance costs are also rising. Premiums for hull war-risk insurance have increased by about ₹30–40 lakh for narrow-body aircraft and ₹90 lakh to ₹1 crore for wide-body flights on routes such as Delhi–Dubai–Delhi.

 

Evacuation operations

 

Airlines have resumed only limited services to West Asia, primarily to evacuate thousands of Indian nationals stranded there. However, these flights are often commercially unviable because aircraft frequently travel nearly empty on the outbound leg and face operational uncertainty at major regional hubs.

 

According to government data, Indian airlines cancelled 278 international flights on Friday while scheduling 96 services to and from West Asia.

 

Airline officials said each flight requires detailed safety assessments, which lengthen turnaround times and reduce aircraft utilisation, further affecting profitability.