We are not recovering even the operating cost on most flights
In the shadow of a fuel crisis born from distant conflict, Air India is retreating from some of its most storied international routes — a quiet signal that the economics of global flight are under severe strain. Beginning in June, the carrier will suspend service to Chicago, Newark, Singapore, and Shanghai, and reduce frequencies elsewhere, as jet fuel prices approach $163 per barrel — nearly double what they were ten weeks ago. The airline, already carrying losses exceeding 20,000 crore rupees, finds itself caught between an unsubsidized international fuel market, the added burden of rerouting around closed Pakistani airspace, and a government whose response has so far been a call for collective sacrifice rather than structural relief. What unfolds next may say as much about the resilience of India's aviation ambitions as it does about the fragility of the global order that makes long-haul flight possible.
- Jet fuel has nearly doubled in price since late February, reaching $162.89 per barrel and consuming up to 40% of Air India's operating costs — leaving the airline unable to recover expenses on most long-haul routes.
- The closure of Pakistani airspace has forced Europe- and North America-bound flights onto longer detours through Vienna and Stockholm, piling additional fuel burn and crew costs onto an already hemorrhaging balance sheet.
- Air India will suspend Delhi flights to Chicago, Newark, Singapore, and Shanghai starting June, cutting roughly 100 daily flights — a contraction that threatens travel plans for thousands and raises job security fears among staff.
- The Federation of Indian Airlines has warned the government that further suspensions are inevitable without relief, yet international routes remain unsubsidized even as domestic fuel prices received a partial rollback in April.
- Prime Minister Modi's Sunday appeal for citizens to consume less fuel and travel signals the depth of the crisis, but offers no concrete lifeline to carriers — leaving Air India in a narrowing corridor between unaffordable losses and uncompetitive fares.
Air India announced this week the suspension of flights to Chicago, Newark, Singapore, and Shanghai, alongside reduced frequencies to San Francisco, Paris, and Toronto — a combined cut of roughly 100 daily flights set to last three months beginning in June. The cause is stark: jet fuel prices have nearly doubled since late February, reaching $162.89 per barrel by early May. Fuel accounts for up to 40 percent of an airline's operating costs, and at these levels, most of Air India's long-haul routes are no longer recovering expenses.
The crisis is compounded by geography and geopolitics. The closure of Pakistani airspace has forced the airline's Europe and North America routes onto longer detours, adding fuel burn and crew costs that make an already difficult equation nearly impossible. CEO Campbell Wilson acknowledged to employees that the airline had little room to maneuver. Air India's accumulated losses already exceed 20,000 crore rupees, and the Tata Sons and Singapore Airlines-backed carrier cannot absorb indefinite shortfalls.
The broader industry is sounding alarms. The Federation of Indian Airlines warned last month that service suspensions were coming unless the government acted. While India rolled back a domestic fuel price hike in April, international routes received no equivalent relief — and jet fuel at Delhi now costs double its March price. Airlines cannot raise ticket prices fast enough to keep pace without losing passengers entirely.
The government's posture has been one of restraint rather than intervention. Prime Minister Modi's call for citizens to consume less fuel and travel less reflected the gravity of an economic crisis rooted in the war in Iran, but offered no structural remedy for aviation. Whether the cuts announced this week will be enough to stabilize Air India — or merely the first in a longer series of retrenchments — depends almost entirely on whether global fuel prices relent.
Air India announced this week that it would suspend flights to four major international destinations and trim service to several others, cutting roughly 100 daily flights across its network for the next three months. The cuts begin in June and affect routes from Delhi to Chicago, Newark, Singapore, and Shanghai—cities that have anchored the airline's international presence. Frequencies to San Francisco, Paris, and Toronto are being reduced rather than eliminated, but the overall contraction is substantial.
The driver is unforgiving: jet fuel prices have nearly doubled since late February. In the week ending May 8, 2026, global average prices hit $162.89 per barrel, up from $99.40 just ten weeks earlier. For an airline, fuel is not a minor line item. It accounts for up to 40 percent of operating costs, which means even steep price swings can hollow out margins and force hard choices. Air India, owned by Tata Sons and backed strategically by Singapore Airlines, is facing harder choices than most.
The airline's CEO, Campbell Wilson, told employees last week that the carrier had little choice. Airspace restrictions—specifically the closure of Pakistani airspace—have forced Air India's Europe and North America-bound flights onto longer, more expensive routes. Flights that once transited Pakistani airspace now must stop in Vienna or Stockholm, adding fuel burn and crew costs that make many routes unprofitable even before the fuel price surge. The airline is not recovering operating costs on most of its long-haul flights, according to a senior official. If fuel prices hold steady or climb further, more cuts are coming.
The financial pressure is acute. Air India has accumulated losses exceeding 20,000 crore rupees. The airline is not alone in its distress—the Federation of Indian Airlines, representing Air India, IndiGo, and SpiceJet, warned last month that service suspensions were possible unless the government intervened. India did roll back a steep domestic fuel price hike in early April, offering relief to carriers flying within the country. International routes received no such relief. Jet fuel at Delhi now costs double what it cost in March, and airlines have made clear that any further increase will render flights financially unviable.
The government's response has been muted. On Sunday, Prime Minister Narendra Modi called on India's 1.4 billion citizens to consume less fuel, fertilizer, and travel—a plea for sacrifice that underscored the severity of an economic crisis rooted in the war in Iran. But no concrete relief for airlines has materialized. Air India faces a narrowing corridor: it cannot raise ticket prices fast enough to offset fuel costs without pricing itself out of the market, and it cannot absorb the losses indefinitely. The question now is whether the suspensions announced this week will be sufficient to stabilize the airline, or whether further cuts will follow if global fuel prices remain elevated.
Notable Quotes
The airline would continue reducing international services as airspace restrictions and higher fuel prices had made several routes unprofitable.— Air India CEO Campbell Wilson
We are not recovering even the operating cost on most flights. A sustained increase will force us to cut more.— Senior Air India official
The Hearth Conversation Another angle on the story
Why is Air India hit harder than its competitors by the same fuel prices?
Pakistani airspace is closed to them. That forces their long-haul flights—the ones to Europe and North America—onto routes that add hundreds of extra miles. They're burning more fuel per passenger just to get the plane where it needs to go.
So it's not just the price spike. It's the geography.
Exactly. IndiGo and SpiceJet fly mostly domestic routes or shorter regional hops. Air India's whole business model depends on those long-haul flights. When you add 500 miles to a transatlantic flight, you're not just spending a little more on fuel. You're spending a lot more, and you're also paying crew for extra hours.
The airline says it's not recovering operating costs on most flights. How is that even possible?
It means the ticket price they're charging doesn't cover the fuel, crew, maintenance, and airport fees. They're losing money on every seat. You can do that for a while if you have backing—Tata and Singapore Airlines are propping them up—but not forever.
The government subsidized domestic fuel but not international. Why the difference?
Domestic fuel is politically sensitive. People flying within India are voters. International routes are seen as luxury travel. But that logic breaks down when the airline is a national carrier and losing money fast.
What happens if fuel prices stay high?
More cuts. The airline said so explicitly. They might suspend routes to Paris or San Francisco next. Eventually, you run out of routes to cut and you're just a smaller airline.
And the passengers?
They lose options. If you need to fly from Delhi to Chicago, there's no Air India flight anymore. You book with a foreign carrier or you don't go.