If you are planning an international trip this summer, you may want to double-check your flight options. Air India is set to reduce some of its overseas services in the coming weeks, as rising fuel costs and global disruptions begin to bite.
Air India will through June and July. The decision comes after a sharp jump in aviation turbine fuel (ATF) prices, along with ongoing airspace restrictions that have made several routes less viable.
In an internal message, CEO and Managing Director Campbell Wilson said the airline has “no choice but to trim schedules” given the current situation. Some cuts had already begun in April and May, as fuel prices climbed sharply and flying conditions became more challenging.
Fuel is one of the biggest expenses for airlines. Normally, it makes up about 30–40% of operating costs. But now, that share has risen significantly, in some cases touching 55–60%, as per industry.
This spike is largely linked to tensions in the Middle East, which have pushed up global oil prices. At the same time, restricted airspace has forced airlines to take longer routes, increasing fuel use and costs further.
Experts say this is not just a short-term issue. Sunil Kadam, Executive Vice President, Airlines & General Aviation, Commercial Risk Solutions, India, Aon, believes the problem runs deeper.
“The situation Indian airlines are facing highlights how fuel price volatility has become a structural risk rather than a short term shock for the aviation sector,” he said.
He explained that rising oil prices, combined with geopolitical tensions and operational limits, are putting immediate pressure on airlines.
“When global oil prices rise sharply, and those increases are compounded by geopolitical tensions in West Asia and airspace constraints, the financial impact is immediate,” he added.
The impact is especially visible on long-haul and international routes. Longer flying times mean higher fuel burn, which quickly eats into profits.
“What we are seeing now is a convergence of risks: energy market disruption, geopolitical instability and operational constraints that reinforce one another and are creating stress on airlines’ balance sheets and cash flows,” Kadam said, pointing out that multiple challenges are hitting airlines at the same time.
This has forced carriers to rethink their operations and, in some cases, reduce services to manage costs.
Airlines are now facing difficult decisions—whether to maintain routes, manage rising costs, or protect their financial health.
“Airlines are increasingly being forced to make difficult trade-offs between maintaining connectivity, managing liquidity and absorbing higher operating costs,” Kadam noted.
He added that those with better financial planning and risk management are more likely to handle such periods smoothly.
The current situation is also changing how airlines look at risks. Instead of treating fuel price spikes as temporary, many now see them as part of a new normal.
“Airlines are starting to treat fuel volatility and geopolitical disruption as persistent features of the operating environment, not exceptional events,” Kadam said.
This shift is pushing airlines to focus more on flexible routes, better planning and stronger financial safeguards.
For passengers, this could mean fewer flight options, possible fare changes, and some disruptions in travel plans, especially during the busy summer season.
While the situation may stabilise if fuel prices ease or geopolitical tensions reduce, for now, airlines, and travellers, are having to adjust to a more uncertain environment.