Tensions in the Middle East Disrupt Global Air Travel: 75% of Gulf Flights Grounded

Indian Airline Disruption: Gulf Flights Cancelled

Key Statistics:

• 72%: Proportion of flights cancelled by Indian carriers to the Gulf region since February 28
• 2,400: Number of flights scrapped by Air India, Air India Express, IndiGo, Akasa Air, and SpiceJet
• 3,300: Scheduled services to the Gulf region operated by Indian carriers
• 35-45%: Proportion of international available seat kilometres (ASK) contributed by West Asia to IndiGo's traffic
• 40%: Proportion of international traffic from the Gulf region for SpiceJet
• 80%: Proportion of overseas operations from the Gulf region for Akasa Air
• 7%: Depreciation of the rupee in FY26

Impact on Indian Carriers

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The ongoing Iran war has disrupted connectivity and revenue streams for Indian carriers, particularly those reliant on the Gulf region. Air India, Air India Express, IndiGo, Akasa Air, and SpiceJet have cancelled around 2,400 flights, about 72% of their scheduled services to the Gulf region since February 28. The Gulf region accounts for nearly half of the country's international passenger traffic, making the disruption particularly severe.

Regional Dependence

The United Arab Emirates (UAE) remains the biggest market for Indian carriers, with over 12.1 million passengers travelling from India in 2025 alone. Saudi Arabia, Oman, Kuwait, Bahrain, and Qatar are also key Gulf markets. The reliance on these routes has magnified the disruption caused by the war.

Operational Challenges

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The operational disruption has been compounded by a sharp rise in jet fuel prices and longer flight paths due to airspace restrictions, increasing fuel burn and flying time. While airlines have introduced fuel surcharges, these remain insufficient to offset the surge in costs. Brokerage estimates suggest that the fuel surcharge is a small component in the overall cost structure, and a full pass-through would make air travel prohibitively expensive.

Currency Devaluation

The weakening rupee has also added to the strain on Indian carriers, inflating expenses for airlines with significant dollar-linked costs such as aircraft leases, maintenance, spare parts, debt servicing, and salaries for foreign crew. The depreciation of the rupee by around 7% in FY26 has compounded the pressure from rising fuel prices.