Why Indian airlines are among the worst hit by the Gulf conflict

As Gulf routes that have long formed the backbone of Indian airlines’ international networks are hit by the ongoing regional conflict, aircraft utilisation at domestic carriers has dropped sharply.

At Air India Express, for example, nearly a quarter of the fleet is effectively idle. “About one in four aircraft of Air India Express’s 115-strong fleet is grounded,” an industry executive said about the country’s second-largest domestic airline.

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While the aircraft are not formally grounded, airlines are flying them once every three to four days to keep them serviceable, and because parking stands are scarce at several airports.

Gulf routes key for Indian carriers

For many Indian carriers, destinations across the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Oman, and Kuwait account for the bulk of their international flying, reflecting the presence of more than 90 lakh Indians living across the Gulf Cooperation Council countries. But flight restrictions and heightened military activity in the region led to about 2,600 flight cancellations by Indian carriers in the first nine days after tensions between Iran and Israel escalated on February 28. While operations in Oman are normal, major hubs such as Dubai, Doha, and Abu Dhabi continue to face severe disruptions and intermittent suspensions.

In more normal times, roughly half of all international passengers flying to or from India travels on a Gulf route, using hubs such as Dubai, Doha, and Abu Dhabi to connect onward to flights to the U.S., Canada, and Europe. Nearly four crore passengers travelled between India and the Gulf in 2025, making it the country’s largest international aviation corridor by far. Traffic from India to the region is about 4.6 times larger than to Europe and nearly 29 times bigger than the U.S. market for Indian carriers, according to an analysis of data from the Directorate General of Civil Aviation.

Ferrying migrant workers

While Air India Express was originally set up in 2004 to serve a very specific market — low-cost travel between southern India and the Gulf for migrant workers — it has repositioned itself since the Tata Group took over. Even so, around 30% of its total flights are to Gulf destinations and it continues to be a dominant player in airports across north Kerala’s Kochi, Kannur, and Kozhikode, and in Tiruchirapalli in Tamil Nadu.

At the full-service arm, Air India, the Gulf accounts for about 20% of total international flying. And at IndiGo, whose international network is largely short-haul, West Asian routes make up around 35% to 40% of international operations, even though international flights account for only about 30% of the airline’s overall network. 

Many IndiGo aircraft are now idling overnight at several airports during hours that were once used to operate frequent back-and-forth flights to Gulf destinations.

“It is costlier to keep aircraft flying than to keep them parked,” the airline official cited earlier said.

Rising costs

Several other factors are also driving up operational costs for airlines. Jet fuel prices in India have risen by about $50 per kilolitre since January to $150 per kilolitre, while aircraft operating Gulf routes are also facing additional war-risk insurance premiums of about ₹18,000 per seat. Though airlines have announced a fuel surcharge of upto ₹400 on domestic routes (and higher for international routes), these barely cover 10% to 12% of the ticket fare, executives say.

The unpredictability of flight schedules to the Gulf caused by security threats, along with last-minute slot allocations by airports in the region, leaves airlines with little time to sell seats, contributing to the underutilisation of aircraft. Most flights to these destinations are operating with very few passengers.

Redeploying their idle aircraft on Southeast Asian routes is not a viable option for airlines, as that market is already oversupplied and earnings per passenger per kilometre are significantly lower than on Gulf routes. The same holds true for domestic services, where margins are thinner and airlines must additionally contend with VAT and other levies on aviation turbine fuel that do not apply to international flights. In India, fuel alone accounts for about 40% of airlines’ operating costs.

Longer flights

For Air India, the challenges are even greater as its flights to Europe and the U.S. are now forced to take a longer southerly route to avoid Iranian airspace, with some U.S. services also requiring fuel stops. This comes on top of the earlier closure of Pakistani airspace following Operation Sindoor last April.

As a result, flight times have lengthened sharply. A Delhi-London service now takes around 12 hours, compared with about nine hours last year. Flights to New York, which must now stop in Rome for refuelling, can take close to 20 hours instead of roughly 15 hours earlier. However, finding an opportunity in the Gulf crisis, Air India has announced 78 additional flights to various destinations in Europe and the U.S.

Industry executives say travel demand is already beginning to soften. “As far as westbound travel is concerned, only essential trips are likely to take place, with many passengers postponing their plans,” one executive said.

Airlines are also seeing a slowdown in inbound travel from Southeast Asia, where many passengers typically connect onward on Indian carriers to their next destinations. Domestic connecting traffic from inbound international travellers has also weakened, in early signs of the broader impact on the industry.

Published – March 14, 2026 10:54 pm IST