IndiGo has warned that the Iran war and the resulting surge in crude oil prices will hit travel demand during the summer season, although airlines are passing on more expenses to passengers.
The budget carrier, which has over 60% market share in India, indicated that its international summer schedule remains fluid. Domestically, it is still recovering from significant operational disruptions that led to mass shutdowns in December.
“Operational costs have increased significantly, with fuel and foreign exchange related costs expected to continue to increase significantly,” an IndiGo spokesperson said in a statement on Tuesday.
IndiGo’s warnings come at a time when the escalating war with Iran continues to impact global crude markets and complicate flight paths. The aviation industry is facing a “triple threat” of increased fuel prices, rising insurance premiums and logistics complexity caused by airspace closures. For Indian carriers, aviation turbine fuel typically accounts for about 40% of operating expenses.
To ease pressure on margins, IndiGo starts imposing fuel surcharge ₹from 425 ₹2,300 on March 14. Other peer companies including Air India, Air India Express and Akasa Air have also imposed similar charges.
“This and other necessary fare increases will have an impact on demand,” an IndiGo spokesperson said. He added that depending on how the geopolitical situation evolves, the airline will “re-adjust capacity accordingly”.
Shares of IndiGo operator InterGlobe Aviation Ltd rose 5.18% on Tuesday ₹Each scrip closed at 4151.15 on the BSE, while the benchmark Sensex closed the day at 74,068.45, up 1.89%.
