West Asia crisis: Indian carriers’ international departures shrink 39% in March

Airlines in India faced a stark awakening to new challenges in West Asia this March. Because a majority of international capacity for Indian carriers is tied to the Gulf, when the region sneezes, Indian carriers catch a cold.

The immediate aftermath was severe: reports emerged of projectiles hitting aviation infrastructure, and airlines found themselves unable to operate flights to most airports in the region.

Amidst this turmoil, the impact across international operations was intense. Data released by the Directorate General of Civil Aviation (DGCA) shows a 40 per cent reduction in departures, a 30 per cent drop in Available Seat Kilometers (ASK), and a 36.5 per cent loss in passengers compared to last March. On a sequential basis, the passenger drop was even steeper at 42 per cent.

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Air India remains robust

The only airline to show relative resilience was Air India. The flag carrier lost only 20 per cent  of departures and 17 per cent of capacity (ASK) compared to last year, with a passenger drop of 19 per cent. This is largely because West Asian flights have been limited on Air India’s mainline, having shifted to its subsidiary, Air India Express, over the last few seasons.

Conversely, Air India Express, predominantly a Gulf-centric carrier prior to privatisation, is the most impacted of all Indian carriers. It saw a 68 per cent dip in departures and a 70 per cent drop in ASK, leading to a 66 per cent reduction in international passengers year-on-year. Sequentially, the drop in departures (64 per cent) and ASK (66 per cent) was slightly lower, but passenger numbers took a massive hit, dropping 70 per cent over February (after normalising for the number of days).

Market leader IndiGo saw a 36 per cent drop in departures and a 33 per cent reduction in ASK, resulting in a 37 per cent reduction in international passengers in March 2026 compared to the previous year. Sequentially, the impact was even harsher than in February, with reductions of 42 per cent in departures and 46 per cent in capacity.

SpiceJet and Akasa Air each hold less than 4 per cent of the international capacity among Indian carriers. Akasa Air shrunk only 9 per cent by departures compared to last March, though this is primarily because its international footprint was limited a year ago. Compared to the previous month, however, departures were nearly halved. Similarly, SpiceJet operated less than half of its international schedule this March compared to March 2025. This is largely due to the airline’s internal downsizing; 100% of its international operations are now limited to Dubai and Sharjah. Notably, the airline launched operations to Fujairah mid-crisis to assist stranded passengers.

Triple whammy

Over the years, the rupee has steadily depreciated against the US dollar. For airlines, this is critical, as a significant chunk of expenditure—such as lease rentals—is dollar-denominated. For IndiGo, which has traditionally favoured the sale-and-leaseback model, the sliding rupee is particularly painful. To mitigate this, the airline began moving toward finance leases while simultaneously expanding international operations to collect revenue in foreign currency.

However, the conflict and subsequent network reduction have created a triple whammy. Oil prices have skyrocketed; fuel typically accounts for 35-40 per cent of an airline's total expenditure. The rupee have slid further (as did other currencies), bloating forex-denominated bills. The international network—the primary source of foreign exchange—has shrunk. This cumulative impact cannot be fully recovered through fuel surcharges or by adding domestic flights.

Respite in April?

April offers limited respite. Airlines have resumed some flights as the situation improves daily, and a ceasefire has taken effect. However, the future remains difficult to predict while the Iran-USA talks deadlock persists.

While airlines are operating more flights than they did in March, increased costs and pressure on fares have shifted demand patterns. The road ahead looks increasingly tough for the industry as it faces significant headwinds for the second consecutive summer.