Air India to cut 100 flights as fuel costs surge
What's the story
Air India is planning to reduce its flight operations by nearly 100 flights a day, owing to the skyrocketing jet fuel prices. The cuts will affect both domestic and international routes, with the maximum impact expected on services to Europe, North America, Australia and Singapore in June. The decision comes as jet fuel price has surged to $179.46 per barrel for the week ending April 24, an 80% increase from $99.40 at the end of February.
Financial strain
Fuel accounts for 40% of an airline's operating costs
With fuel accounting for up to 40% of an airline's operating costs, even small price changes can significantly impact profitability and lead to higher ticket prices. "We are not recovering even the operating cost on most flights. A sustained increase will force us to cut more," a senior Air India official said, as reported by the Economic Times.
Industry appeal
FIA calls for immediate government intervention
The Federation of Indian Airlines (FIA), which represents major carriers such as Air India, IndiGo and SpiceJet, has written to the Ministry of Civil Aviation seeking immediate government intervention on aviation turbine fuel (ATF) pricing. The federation warned that the sector is under "extreme stress" amid the ongoing West Asia crisis. They have requested a temporary deferment of excise duty on ATF, reduction of VAT in key states, and reinstatement of crack band according to a pre-agreed formula.
Operational challenges
Air India already facing ₹20,000 crore in losses
Air India is bearing the brunt of rising fuel costs more than its competitor IndiGo, owing to its wider international operations. The closure of Pakistani airspace has forced longer routes for Europe and North America-bound flights, sharply increasing fuel consumption and crew costs. The airline has already racked up over ₹20,000 crore in losses as Tata Sons and strategic partner Singapore Airlines face pressure to cut costs and turn around the struggling carrier.