Ajay Singh, the chairman and managing director of SpiceJet, cautioned that Indian carriers might have to reassess their growth plans as crude oil prices remain excessively high, even at $90 per barrel.
“We don’t know where things are really going,” Singh said, according to Bloomberg. He noted that domestic airfares are unlikely to remain stable, as airlines will likely have no option but to introduce a “fuel surcharge”.
Indian carriers have already raised ticket prices on long-haul routes by about 15%, the report said. Singh noted that airlines will need to pass on some of the increased costs to passengers, despite the strong price sensitivity of the Indian market, suggesting that domestic fares could also rise.
Local airlines such as IndiGo, Air India, and Ltd. are reportedly among those most affected outside the as the Iran conflict enters its second week. Their significant dependence on Gulf routes and rising fuel prices are further worsened by restrictions on Pakistani airspace, which have been in place since mid-2025 after a border dispute.
Airlines in the region are also less safeguarded against rising oil prices compared with competitors in Europe or the United States, leaving them more exposed to sudden increases in jet fuel costs. Although crude oil prices surged close to $120 per barrel on Monday, they later declined after US President said the conflict could end “very soon,” without providing a specific timeline.
Singh mentioned airline expansion in the region is likely to be affected if the Middle East crisis persists. A note from Bloomberg Intelligence last week highlighted that SpiceJet has its entire international schedule for March linked to the Middle East, while Air India Express has about 60% exposure and IndiGo around 41%.
He also said airlines may need to reassess whether operating their full fleets is financially viable. If flying certain aircraft leads to losses, airlines will have to evaluate whether continuing those operations makes sense, Singh stated.
Gulf region disruption is especially painful for Indian carriers, says report
Bloomberg Intelligence analysts Eric Zhu and George Ferguson noted in a March 2 report that disruptions in the Gulf are particularly challenging for Indian airlines, as “international routes provide a natural currency hedge against rupee depreciation — critical now with crude prices rising due to the war”.
Despite these challenges, Singh does not anticipate a domestic shortage of jet fuel, provided crude oil shipments continue, since Indian refineries produce their own Aviation Turbine Fuel.
Meanwhile, Asian airlines are increasing ticket prices and preparing backup plans, including possibly grounding aircraft. Hong Kong Airlines announced on Tuesday that it will raise fuel surcharges starting March 12, including a HK$5 (INR 59.22) increase on flights to mainland China and a HK$150 (INR 1788) hike on long-haul routes such as those to North America.