Major Indian airlines including Air India and IndiGo are planning to cut operations for up to three months, starting June 1. The carriers have attributed significant surge in Aviation Turbine Fuel (ATF) prices due to the US-Iran war, along with the seasonal slump after the school holiday period as the reason behind the move, according to a report by the New Indian Express citing people aware of the development.
Tata-owned Air India will cut around 15% of its domestic operations and Interglobe owned IndiGo may reduce 5-7% of its services. This comes after Air India had cut down its international operations.
ATF typically constitues around 40% of an airline's operational costs. Prices soared with the disruption of global crude oil supply due to the ongoing tensions in the Middle East since February 28 and closure of the Starit of Hormuz.
Change In Air India's Flight Operations
The report quoted a senior Air India source who said, “We operate an average of 3,800 flights per week. The ATF cost for our domestic flights used to be Rs 80,000 per kilolitre. It has now risen to more than Rs 1 lakh, depending on the city, as VAT imposed by state governments varies. It would not be financially viable to operate when ATF prices are this high.”
The person further confirmed that the airline will not withdraw any route entirely, but we will reduce the number of flights operated on specific sectors, adding "there is a long list of services that we plan to scale down.”
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Which Routes Might Get Affected?
Air India may reduce services from Mumbai to Ahmedabad, Nagpur, Patna and Bhopal. From Delhi, the number of flights to Hyderabad, Bengaluru and Kolkata will also be cut, the report said. “While a major portion of the reductions will be from Mumbai and Delhi airports, the southern region will also be affected, as return flights on these sectors will likewise be cancelled,” the report quoted the person.
The move also aligns with the cut in international operations as the number of passengers taking domestic connecting flights to hubs such as Delhi and Mumbai is also expected to decline, hence expecting lower demand, the report said.
The airline will not operate certain flights from June 1 until the end of August. These flights have already been removed from the website to prevent passengers from booking them, it added.
What Does IndiGo Plan To Do?
While IndiGo plans to cut 5% and 7% domestic operations, an airline source told the publication, “Historically, the months following the academic vacation period witness lower occupancy levels. Due to the expected fall in demand, we will scale down operations from June 1. IndiGo operates 1,950 flights daily, so even a small percentage cut translates into a significant number of cancellations."
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