India-Pakistan Tensions: Airlines Face Daily Revenue Losses Of Nearly Rs 30 Crore, HSBC Report Says
The escalating situation has prompted the Indian government to cancel flights to and from around 24 airports bordering Pakistan.
India has closed several airports for civil flight operations. These closures include major airports such as Chandigarh, Srinagar, Amritsar, Ludhiana, and Bhuntar. Indian airlines are seeing financial losses as geopolitical tensions between India and Pakistan escalate.
Following a government directive, Indian carriers have cancelled approximately 320 flights per day, resulting in substantial revenue and Earnings Before Interest and Taxes losses. According to an HSBC report, IndiGo, Air India, and SpiceJet are among the hardest hit, with estimated daily EBIT losses of Rs 7 crore, Rs 5 crore, and Rs 1.5 crore, respectively.
The conflict intensified with a series of cross-border strikes and retaliatory attacks. India’s Operation Sindoor, which began on May 7, targeted terror infrastructure in Pakistan and areas under its administration in Kashmir. These strikes were in response to the April 22 terrorist attack in Pahalgam, Jammu and Kashmir, which claimed 26 lives.
The escalating situation has prompted the Indian government to cancel flights to and from around 24 airports.
IndiGo has cancelled close to 170 flights, Air India group around 115, and SpiceJet approximately 35 flights. These cancellations also include around 14-15 international flights to destinations such as Thailand, Sharjah, Abu Dhabi, Dubai, and the UK, as noted in the HSBC report.
The financial impact on Indian aviation is considerable. IndiGo's capacity is reduced by 8.5%, Air India's by 18%, and SpiceJet's by 26%. The estimated daily revenue losses are Rs 16.6 crore for IndiGo, Rs 10.5 crore for Air India, and Rs 2.3 crore for SpiceJet.
The hotel industry is also feeling the strain, with potential daily EBIT losses of Rs 1 to 1.5 crore for Indian Hotels Co. and Rs 5 crore for Ventive Hospitality, due to the decline in inbound international tourism, the report said.
As of Friday, flights from major airports such as Chandigarh, Srinagar, Amritsar, Ludhiana, and Bhuntar have been cancelled and operations from these airports have been shut down for civil flights.
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