Indian carriers are responding differently to a fresh spike in aviation turbine fuel (ATF) prices, with IndiGo holding its international expansion plans while Air India trims capacity across key routes to contain costs.
IndiGo has continued operating its European services using six wet-leased Boeing 787-9 aircraft from Norse Atlantic Airways, under an agreement that covers aircraft, cockpit crew and maintenance, while the Indian carrier manages cabin crew and ticketing. The arrangement, initially for six months and extendable up to 18, comes even as the operating environment tightens.
The airline is also restoring routes affected by the West Asia crisis and expanding selectively. It has resumed Doha services using wet-leased Airbus A321neo aircraft from Qatar Airways, launched Chennai–Réunion flights, and continues operations to Athens using its own Airbus A321XLR, with additional long-haul routes planned as more aircraft join the fleet.
Contrasting Strategies
In contrast, Air India has undertaken one of its steepest recent network pullbacks, cancelling over 100 flights, largely on international sectors. Frequencies to European destinations such as Copenhagen and Zurich have been reduced to three weekly from four, while Paris has been cut to 10 from 14. Services to Sydney and Melbourne are down to five a week from seven, and Shanghai has been reduced to four from five. North American routes including Toronto, Vancouver and San Francisco have also seen cancellations, alongside some reductions on domestic routes such as Delhi, Bengaluru, Hyderabad and Chennai.
The divergence comes as fuel prices emerge as the primary cost pressure. International ATF rates have risen about 5% in the latest revision, marking a second consecutive monthly increase, with Delhi prices hovering near $1,512 per kilolitre. Fuel, which accounts for up to 40% of airline operating costs, has surged amid geopolitical tensions in West Asia, while longer flight paths due to continued closure of Pakistani airspace have further increased fuel burn and crew costs.
Among other carriers, responses remain limited. Akasa Air, which has a smaller international footprint focused on West Asia and Southeast Asia, has seen some schedule adjustments in West Asia amid geopolitical tensions but has not announced any network-wide cuts. SpiceJet continues to operate its international services to destinations such as Dubai and Fujairah without any significant reductions so far, though some domestic trimming is expected after the return of three wet-leased Boeing 737 Max aircraft to UK-based lessor Ascend Airways.
Fuel Burn Dilemma
Air India’s challenges are compounded by operational factors. Several affected routes are served by Boeing 787-8 aircraft, with at least three grounded for refurbishment, limiting fleet availability. Analysts say this has reinforced the case for capacity rationalisation. Aviation analyst Mark Martin said IndiGo’s wet-lease model carries inherent cost risks as lease payments are fixed and typically 30–40% higher than dry leasing. With fuel prices rising, these combined costs are likely to weigh on its financials.
For Air India, a largely owned and dry-leased fleet offers greater flexibility. With weaker inbound demand from Europe outside peak travel periods, cutting capacity and optimising routes is a prudent step to protect margins. Given current geopolitical uncertainty and cost pressures, Martin said scaling back operations appears the more rational strategy, making Air India’s approach the “smarter” one for now.