Indian aviation industry is losing an estimated ₹150–₹200 crore every day due to the escalating conflict in West Asia. The crisis, triggered by the killing of an Iranian leader on February 28, has paralyzed one of India’s most critical international flight corridors.
The Ministry of Civil Aviation has called an emergency meeting today with major domestic carriers, including IndiGo, Air India, SpiceJet, and Akasa Air, to review evacuation plans for stranded citizens and manage the mounting financial fallout.
The ₹200 Crore Daily Drain
The massive daily loss is a combination of direct revenue hits and skyrocketing operational expenses.
- Massive Cancellations: Over 1,200 flights operated by Indian carriers have been cancelled since the conflict began. In the first 48 hours alone, the industry lost roughly ₹400 crore in ticket revenue and refunds.
- The “Detour” Tax: With Iranian and other regional airspaces closed, flights to Europe and the U.S. are being rerouted via Central Asia or southern paths over East Africa. These detours add 2 to 4 hours of flying time per trip.
- Fuel & Crew Costs: The longer “block time” requires significantly more Aviation Turbine Fuel (ATF), which has become pricier as global crude surged by 15% this week. Additional costs for crew rotations and maintenance are further thinning margins.
Impacted Sectors and Carriers
The disruption has hit the busiest international routes for Indian travelers.
| Sector | Impact Detail |
| India-UAE (Dubai/Abu Dhabi) | The busiest sector; saw a near-total halt in the first 72 hours. |
| Long-Haul (US/Europe) | Air India is operating New York/Newark flights with refueling stops in Rome. |
| IndiGo | Most affected by volume; cancelled over 450 flights in just two days. |
| Air India Group | Has extended its suspension of broader West Asia services until March 10. |
Operational Challenges
- GPS Spoofing: Airlines have warned pilots of intensified GPS jamming near conflict zones, adding a layer of technical risk to rerouted flights.
- Grounded Fleet: As of March 2026, roughly 13–15% of the Indian fleet was already grounded due to engine supply chain issues, leaving airlines with very little capacity flexibility to handle these emergency reroutes.
- Stranded Passengers: Thousands of Indian workers and tourists remain stuck in hubs like Dubai and Doha, with some reports of one-way fares to London touching ₹1.4 lakh due to the supply crunch.
Financial Outlook for FY26
Credit rating agency ICRA has projected that the Indian aviation industry will report a staggering net loss of ₹17,000–₹18,000 crore for the current financial year (FY26). While lower ATF prices earlier in the year provided a buffer, the current combination of high oil prices, currency depreciation (rupee pressure), and war-time detours has created a “worst-case” financial scenario.
