Middle East Crisis Jolts Air India: Costs Rise, Routes Disrupted, CEO Warns Of Bigger Impact
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Air India slashes over 2500 flights as Middle East crisis, Iran US conflict and soaring Brent crude and ATF costs force reroutes, fuel surcharge and safety first cuts.
Air India faces financial challenge amid the flight cancellations and disruptions due to the Middle East crisis
Air India is among the worst-hit airlines during the Middle East crisis that led to the disruption of international flight routes and schedules. With the ongoing conflict between Iran and US entering the fourth week since the killing of Iran’s Supreme Leader Ali Khamenei, no light of truce appears in the dark tunnel, sending jitters and anxiety to the globe.
The constant rise of crude oil prices spooks the world, as its impact would soon snowball into a full-fledged form, hitting common people and companies alike with rising inflation and increasing input costs, respectively.
Days of concern for Air India won’t be ending soon. As the hike in ATF (Airplane Turbine Fuel), which is likely to be announced by OMCs on the first of April, will raise the operational costs and thin the margins.
Wilson noted that the financial impact of this crisis is yet to be fully felt from the next month. In an internal message to employees, Wilson wrote: “The financial impact of this crisis is yet to be fully felt… although the spot price of jet fuel has more than doubled, most of the impact will only hit us from next month.”
Over 2,500 flights of Air India have been cancelled in the three weeks since the crisis erupted, hitting the financials hard. Moreover, the company is forced to carry on about 30 per cent of its normal Middle East schedule. “Airports and/or airspace are closed, or are assessed to be beyond our safety thresholds,” he noted.
Operations on long-haul routes have also been affected. Flights to the UK, Europe and North America are being rerouted to avoid conflict zones, adding both time and fuel burn. “Other flights… are being rerouted even further… consuming more fuel and adding more time,” Wilson said.
In an attempt to offset some of the damages being inflicted upon it due to the ongoing disruption, Air India has announced a fuel surcharge. It means air tickets of Air India will get a little costlier for passengers, making it harder to travel by plane.
However, Wilson cautioned that there’s a limit of its pricing power. “Not every customer is willing to pay higher airfares, so there is a limit to how high we can price before demand drops,” he said.
Wilson forewarned that they have to adjust by cutting the flights if cost pressures persist.
Emphasising safety as the top priority, Wilson said Air India will continue to closely monitor the situation and adjust operations as needed, even as it navigates one of the most volatile operating environments in recent times.
Brent crude futures spiked to $112 per barrel in the past few days. This is sharply higher than the price below $70 per barrel before the war began.
March 22, 2026, 16:10 IST
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