Akshay DidwaniyaTata Group-owned Air India is pulling back on domestic routes cutting up to 22% of flights between June and August 2026 as skyrocketing jet fuel costs, triggered by the Middle East conflict, push the airline deeper into financial trouble.
Air India Cuts One in Five Domestic Flights to Survive Fuel Cost Crisis
Air India is trimming its domestic flight schedule sharply by up to 22% as the airline battles soaring fuel costs that have made certain routes financially impossible to sustain.
The Tata Group-owned carrier confirmed Wednesday that operations on select domestic routes will be reduced between June and August 2026. The decision follows an earlier round of cuts to international services where the airline already pulled back by around 27%.
Jet Fuel Costs Cross Rs 1 Lakh Per Kilolitre: A Critical Threshold
An Air India official laid out the numbers starkly. Jet fuel costs for the airline have surged from approximately Rs 80,000 per kilolitre before the Iran war to well over Rs 1 lakh per kilolitre now.
“It has become financially unviable to operate flights on certain routes,” the official said.
Fuel accounts for roughly 40% of the airline’s total operational expenses making it the single biggest cost driver. With prices spiking this sharply, every extra flight burns cash the airline simply cannot afford right now.
The price of aviation turbine fuel also varies across Indian states depending on the VAT levied by each state government adding another layer of unpredictability for the airline’s planners.
A Cascading Effect: International Cuts Hit Domestic Demand Too
The Iran conflict hasn’t just pushed up fuel prices it has also dented passenger demand on domestic routes.
Airline officials pointed out that the reduction in international flights has caused a ripple effect. Fewer overseas passengers are now connecting through major hubs like Delhi and Mumbai which has directly reduced demand for domestic feeder routes into those airports.
This drop in connecting traffic became another key reason Air India moved to rationalize its domestic schedule.
Air India’s Weekly Flight Network: What the Numbers Say
Air India currently operates roughly 4,400 weekly flights in total. Of these, around 3,600 are domestic services and 800 cover international routes. A 20–22% cut to domestic operations means nearly 720 to 790 domestic flights could disappear from the weekly schedule through the summer months.
“In continuation of our previously announced adjustments to select international services between June and August 2026, we have temporarily rationalised operations on certain domestic routes during the same period, with a reduction in frequencies on select routes,” Air India said in its official statement.
What Happens to Passengers Whose Flights Are Affected?
Air India has assured that no passenger will be left stranded without options. The airline said affected travelers will receive proactive assistance including re-accommodation on alternate flights, complimentary date change options, or full refunds wherever applicable.
“Air India will continue to monitor demand and operating conditions closely, with a view to restoring frequencies as conditions stabilise,” the airline added.
Losses Pile Up Rs 26,800 Crore in FY 2025–26
The flight cuts arrive against a deeply troubling financial backdrop. Air India reportedly clocked a staggering loss of Rs 26,800 crore in the financial year 2025–26 a 12-fold increase over losses from the previous year.
That number puts enormous pressure on the Tata Group which has already poured billions into reviving the national carrier since acquiring it from the government to consider yet another round of capital infusion.
The airline management is clearly under intense pressure to bring costs down and stop the bleeding and trimming unviable domestic routes appears to be the most immediate lever available.
Whether fuel prices ease and whether Air India can claw back to a stable footing remains to be seen.
The BRICS Times
Pratik Agrawal
