The letter highlights growing financial pain in the world’s fastest-growing market where, even before the Iran crisis, airlines were hit hard by a Pakistani airspace ban for international operations due to diplomatic tensions.
In December, widespread aviation disruptions due to mass flight cancellations by IndiGo over operational issues prompted authorities to cap airfares depending on the distance, with the maximum being 18,000 rupees ($192.04) for a one-way journey.
The crisis has since eased, but caps remain in place without any timeline. Indian airlines are incurring ”huge” revenue losses and face higher operational costs in part because of a jump in jet fuel prices due to the Iran war, the Federation of Indian Airlines said in a private letter to the government on March 12, seen by Reuters.
Current situation may threaten viability
”If the current situation continues, airlines will face severe financial losses, pushing several operators closer to unsustainable financial conditions and potentially threatening their continued viability,” the March 12 letter, which was not made public, said.Also read: Air India to operate 50 flights on March 18 to West Asia amid regional conflict
The civil aviation ministry and the FIA did not respond to requests for comment. IndiGo and Air India, which control more than 90% of India’s domestic market, did not respond. A spokesperson for SpiceJet also did not respond to a request for comment.
A $1 per barrel change in fuel prices could impact IndiGo’s full-year fuel bill by about 3 billion rupees, HSBC analysts have said. Jet fuel prices have risen sharply in recent days due to the Middle East war.
IndiGo and Air India are also flying longer routes to reach Europe and North America owing to airspace restrictions.
Also read: US-Israel war on Iran: Akasa Air resumes select flights to and from Riyadh and Mumbai
In a separate letter sent on Thursday, the FIA also urged the government to withdraw a directive mandating that a minimum 60% of seats on any flight be made available without additional charges for seat selection, saying it could lead to higher fares.
($1 = 93.7320 Indian rupees)
