Escalating tensions in the Middle East are creating problems for India’s aviation sector, with flight cancellations and rising fuel costs putting both operations and finances under pressure, according to a report by HSBC Global Investment Research.
In a note dated March 2, HSBC said Indian airlines have had to suspend all flights to the Middle East and some routes to Europe because of airspace closures and instability in the region. While some flights may eventually resume using longer alternate routes, these detours will increase flying time and operating costs.
The report warned that these cancellations could significantly reduce airline capacity. For example, IndiGo could see about 19–20% of its total capacity affected, which equals around 60–65% of its international flights. SpiceJet could be hit harder, with 30–32% of its total capacity impacted. Air India may face disruptions in over 40% of its flights, while Akasa Air could see 13–14% of its capacity affected.
HSBC’s assumptions include the cancellation of all flights to the Middle East, most services to Europe, and some routes to the United States.
The financial impact could be significant. IndiGo may face a daily revenue loss of ₹45–50 crore and a daily net profit loss of ₹4–5 crore. For SpiceJet, the estimated daily revenue loss is ₹5–5.5 crore, with a net profit loss of ₹0.25–0.35 crore per day.
The report highlights the ongoing risks for Indian airlines, as geopolitical tensions continue to affect international travel and operating costs. Airlines may have to adjust their schedules, reroute flights, and manage higher fuel and operational expenses until the situation stabilizes.