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Higher Airfares Due To Further Cost Escalation Will Hit Demand: IndiGo Amid Middle East Conflict

The escalating conflict involving US, Israel and Iran have pushed jet fuel prices higher and airlines' operations have also been disrupted due to the airspace curbs in the Middle East.

Higher Airfares Due To Further Cost Escalation Will Hit Demand: IndiGo Amid Middle East Conflict
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The country's largest airline IndiGo on Tuesday said international flights in the summer schedule will vary depending on the Middle East situation and flagged that demand will be impacted if there is any further rise in costs that will push airfares higher.

The escalating conflict involving US, Israel and Iran have pushed jet fuel prices higher and airlines' operations have also been disrupted due to the airspace curbs in the Middle East.

For Indian carriers, jet fuel expenses account for around 40% of the overall operating costs.

In a statement to PTI, an IndiGo spokesperson on Tuesday said it intends to start its domestic summer schedule with nearly 2,000 daily flights in April.

"IndiGo's international schedule was planned at similar levels to winter, but the deployed scale will, of course, vary based on ongoing circumstances in the Middle East. It should be noted that there is a very material escalation in operating costs, with fuel and forex related costs expected to continue to increase very substantially, in addition to what is already an escalating cost environment," the spokesperson said.

ALSO READ: IndiGo Target Price Cut: Costly Fuel, Gulf Disruption To Drag Earnings, Says Goldman Sachs

While the number of flights planned now is almost the same as that of the 2025 summer schedule, it is lower than the services that were scheduled for the ongoing winter schedule.

IndiGo had to reduce the winter schedule in the wake of massive operational disruptions that happened in early December last year.

Aviation regulator DGCA has approved the summer schedule for the domestic flights starting from March 29 till October 24.

"While we have introduced a fuel surcharge to compensate some of this cost, this and other fare increases required will have an effect on demand. This is an extremely fluid operating environment which the airline will be closely monitoring and recalibrate its capacity accordingly both in domestic and international," the spokesperson said.

IndiGo has started levying fuel charges ranging from Rs 425 to Rs 2,300 on domestic and international flight tickets from March 14.

Air India, Air India Express and Akasa Air are also levying fuel surcharges.

Apart from elevated fuel prices, sudden airspace curbs and high insurance premiums are increasing the operational costs and complexities for the airlines.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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