The conflict across West Asia continues to escalate and the impact is visible across sectors, especially aviation. More than 1,221 flights were cancelled by Indian carriers between February 28-March 3. HSBC Global Investment highlighted that if the cancellations continue for 7 days, it could significantly dent profit for key Indian carriers like IndiGo and SpiceJet in the near-term.
India’s biggest airline by market share, IndiGo has cancelled more than 500 flights to the Middle East and select international destinations between February 28 -March 3. Foreign carriers cancelled 388 flights in the same period.
HSBC flags Rs 32 crore hit to IndiGo
A report by HSBC Global Investment Research noted that if flight cancellations last for seven days, it could erode about Rs 32 crore from IndiGo’s profit before tax. This would be around 6% of its Q4FY26 estimate and about 1.2% of its full-year FY26 profit before tax estimate.
Estimating that IndiGo has cancelled all the flights to the Middle East or Europe that had to cross Middle East, then the cancellations could account for about 19–20% of IndiGo’s total capacity, which includes nearly 60–65% of its international capacity, HSBC noted.
IndiGo may lose up to Rs 50 crore daily in revenue
The brokerage believes SpiceJet could face relatively higher pressure because it operates aircraft on expensive wet leases, which must be paid for irrespective of usage.
For SpiceJet, the impact could be around 30–32%, while Air India may see more than 40% of its capacity affected.
The report noted that while airlines can operate some services through longer alternate routes, HSBC said these diversions would increase costs and weigh on profitability.
Daily revenue and profit hit
On a daily basis, HSBC estimates IndiGo could lose around Rs 45–50 crore in revenue, while SpiceJet may lose about Rs 5–5.5 crore.
IndiGo’s net profit could take a hit of around Rs 4–5 crore per day, while SpiceJet’s net profit may decline by about Rs 25–35 lakh daily.
Jet fuel spike could hit airlines
Brent crude which has already risen to $84 on March 4, from $72 before the war started on Saturday could push jet fuel prices higher if conflict escalates further.
HSBC said every $1 per barrel increase in jet fuel prices could raise IndiGo’s full-year fuel bill by around Rs 300 crore. For SpiceJet, the impact could be about Rs 27.5 crore.
HSBC sees no major long-term risk
Despite the near-term risks, HSBC said it does not see any major threat to IndiGo’s long-term investment thesis. For the short term HSBC expects Airlines to pass on some of the higher fuel costs to customers, which could limit the hit to profitability.
However, if cancellations persist for a longer period, HSBC said, carriers may adjust their network plans.