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‘How to have financially strong airlines,’ India finally begins to figure out

Airlines face profit crash: 2026 earnings nearly halved as fuel shock hits aviation

Global airlines face a profit plunge in 2026, nearly halving earnings to $23 billion due to soaring fuel costs and Middle East conflict disruptions. Despite strong passenger demand and projected record revenues exceeding $1.1 trillion, profitability per passenger is expected to drop significantly. This geopolitical instability and rising operational expenses are reshaping the industry's financial outlook.

West Asia war fuels airline bankruptcy risks

Soaring jet fuel prices driven by conflict in the Middle East are likely to push more airlines into bankruptcy and spur more sector consolidation this year and next, the head of the global airline body said on Saturday. Global airlines are grappling with higher fuel costs driven by the U.S. and Israel's war with Iran, which has choked jet fuel supplies and disrupted key air corridors, forcing costly detours.Also read: Airbus delays XLR deliveries to IndiGo as war hits suppliers Budget carriers have been among ‌the hardest hit, ⁠lacking higher margin ⁠revenue streams such as premium cabins, high-paying travelers and credit card loyalty programs. The strain is already showing: U.S. budget airline Spirit Airlines collapsed last month, and it will not be the last, said Willie Walsh, director general of the International Air Transport Association, the industry's main trade body. "Unfortunately I think there will be some carriers that will find this high fuel price very difficult to cope with," Walsh told Reuters at IATA's annual summit in Rio de Janeiro, adding he expects some airlines to go out of business and others to be acquired by larger carriers. Even so, the pressure does not spell the end of the low-cost airline model, which continues to thrive outside the United States, where the big three carriers, United Airlines, Delta Air Lines and American ⁠Airlines, are squeezing ‌out budget competitors, Walsh said. "I don't see that the low-cost model is broken, in fact, quite the opposite," he said, highlighting Ryanair's strong performance in Europe as an example. There is one blockbuster deal Walsh does not see happening: United Airlines CEO Scott Kirby's audacious ⁠proposal to buy arch rival American Airlines and create a U.S. aviation behemoth. The idea, which surfaced earlier this year, failed to get done despite Kirby raising it with President Donald Trump. "I don't think that's going to happen. I think the regulatory hurdles would be very significant. I don't know whether that was a genuine effort to pursue consolidation or Scott just trying to stir up some media," Walsh said. MIDDLE EAST AIRLINE WOES The Iran conflict has upended traffic flows through Middle Eastern hubs such as Dubai, Doha and Abu Dhabi, creating acute challenges for Gulf carriers including Emirates, Qatar Airways and Etihad. Walsh said he didn't think the conflict would do permanent damage to the Gulf as an aviation hub given its strategic geographic importance and the value of the popular Gulf carriers, which account for 14% of ‌global capacity. "That capacity cannot be replaced by airlines from other regions around the world," Walsh said. "Once things settle down, I would expect the Gulf carriers to regain their important position in the market." Adding to the strain is the slow pace of aircraft deliveries from Boeing and Airbus, along with engine delays from ⁠GE Aerospace and Pratt & Whitney, a unit of RTX, limiting airlines' ability to expand fleets and improve efficiency.Also read: Airline chiefs grapple with fuel shock, fare test at Rio summit Walsh said the industry is increasingly frustrated by the delays, particularly as engine makers post strong profits while airlines struggle. He estimates supply chain disruption cost airlines about $11 billion last year. "We're disappointed that they're not moving faster. We're disappointed that they're not sharing the pain that the airline industry is sharing," he said. Aircraft and engine makers have said that much of the delays are out of their control, stemming from post-pandemic supply chain disruptions and political trade disputes. As airlines come under financial strain and climate policies lose momentum in the U.S. under Donald Trump, industry leaders have grown more cautious about meeting a 2050 net zero emissions target. Walsh said IATA is not ready to abandon the goal. "I certainly believe it's more challenging to achieve net zero in 2050 because we've not made the progress that we had expected to see on the development of sustainable fuels," he said.

Rio summit: Airline chiefs grapple with fuel shock

Government Fixes Jet Fuel Price For Airlines: What It Means For Your Next Flight Booking

The Centre has fixed the aviation turbine fuel, or ATF, benchmark at Rs 86.32 per litre for domestic operations under a Rs 10,000-crore stabilisation plan.

Middle East crisis: IndiGo grounds flights to six overseas destinations amid cost pressures

IndiGo is temporarily halting flights to six international destinations, including Hong Kong and Shanghai, until September 30. This strategic move aims to optimize its network amidst softer travel demand and escalating operating costs. The airline plans to resume services on October 1, contingent on improved market conditions, while maintaining a significant portion of its global operations.

IndiGo suspends ops to 6 int'l destinations

IndiGo has announced the temporary suspension of flights to six international destinations as it adjusts its network amid softer travel demand and rising operational costs.The airline said the move is part of a broader network optimisation strategy aimed at matching capacity with current market conditions while maintaining operational efficiency.Which International Routes Has IndiGo Suspended?According to the airline, services to the following destinations will be temporarily suspended:Hong KongShanghaiHo Chi Minh CityLangkawiKrabiSiem ReapFlights to Hong Kong, Shanghai, Ho Chi Minh City, Langkawi and Krabi will be suspended from July 1, while services to Siem Reap will be paused from July 3.Read more: HSBC says Asia's largest slum could soon have metro stations, green spaces & 125,000 new homesThe suspension is expected to remain in place until September 30.Why Has IndiGo Suspended These Flights?IndiGo said the decision was driven by a combination of softer seasonal demand and a challenging operating environment.The airline noted that the upcoming quarter typically witnesses lower travel demand, especially on certain international routes.At the same time, airlines continue to face increased operational expenses, making it necessary to review network deployment.In a statement, IndiGo said: "These measured changes are designed to align capacity with current market conditions and demand trends, while ensuring the airline maintains reliability and network integrity across its global destinations."Will IndiGo Restart These Routes?Yes. The airline has confirmed that bookings for all affected routes will reopen from October 1, subject to an improvement in market conditions.IndiGo also stated that it remains prepared to restore services earlier if demand improves and operational conditions become more favourable.Airspace Restrictions Continue To Affect AirlinesApart from rising costs, airlines are also dealing with continuing airspace restrictions that have impacted flight operations and route planning.Several carriers globally have been forced to adjust schedules, reroute aircraft and review international networks due to changing geopolitical and operational challenges.IndiGo said it will continue monitoring the situation closely before making further decisions regarding these routes.IndiGo Retains More Than 1,800 Weekly International FlightsDespite the temporary suspension of six destinations, IndiGo said its international network remains largely intact.The airline continues to operate more than 1,800 international flights every week across its global network.This allows the carrier to maintain strong international connectivity while adjusting capacity where demand is currently weaker.What Does This Mean For Travellers?Passengers planning trips to the affected destinations between July and September may need to consider alternative airlines or adjust their travel plans.However, travellers heading to other international destinations served by IndiGo are unlikely to see any major disruption, as the airline has retained the majority of its overseas operations.The move highlights how airlines are increasingly balancing demand, operating costs and network efficiency as global travel patterns continue to evolve.IndiGo Focuses On Network OptimisationThe temporary suspension reflects a broader trend in the aviation industry, where airlines are becoming more flexible in managing capacity.Rather than operating flights with lower demand, carriers are increasingly redeploying aircraft to stronger-performing routes and adjusting schedules based on market conditions.For IndiGo, the strategy is aimed at protecting profitability while ensuring reliable operations across its growing domestic and international network.Inputs from PTI

Cabinet clears ₹10,000-cr fund to shield airlines, offset jet fuel price swings

The one-time budgetary support of ₹10,000 crore will allow Oil Marketing Companies (OMCs) to provide Aviation Turbine Fuel (ATF) at stable prices to airlines.

'Much-needed support’: Air India on Centre’s ₹10,000-crore aviation fuel price relief package

The government has approved a ₹10,000-crore fund to help keep aviation fuel prices stable for airlines amid rising global fuel costs.

The FIFA World Cup transit test

The 2026 FIFA World Cup will be the biggest tournament in soccer history, spread across 16 cities in the United States, Canada and Mexico. For millions of fans, getting to the games may prove almost as challenging as the matches themselves.With airfares climbing, gasoline prices rising and airport security lines stretching patience to the limit, North America's rail and bus operators see the month-long tournament as a rare opportunity: a chance to persuade travelers to swap planes and cars for trains, buses and public transit.For transportation providers, the World Cup is more than a sporting spectacle. It is a high-stakes audition before a global audience."We want you to be able to use our system seamlessly from the minute you decide to come to the World Cup, all the way into the games, and after that to get home," said Conan Cheung, chief operations officer for LA Metro, the public transportation authority serving the Los Angeles region.Los Angeles, which will host eight matches including the U.S. team's opening game, hopes the tournament will help reshape perceptions of a city often synonymous with traffic jams and sprawling freeways.For Cheung, the objective extends beyond impressing foreign visitors. The World Cup is also an opportunity to convince more Angelenos to embrace a public transportation system that has expanded significantly in recent years.That challenge resonates across much of the United States and Canada, where public transit networks are often less extensive than those found in Europe or Asia and where private vehicles remain the preferred mode of transport."Transit providers have an opportunity to provide service to a group of people who do not typically use transit on a day-to-day basis," said Yonah Freemark, a principal research associate at the Washington-based Urban Institute."Many of the World Cup fans coming from the U.S. or Canada do not necessarily use transit services regularly."The impressions those travelers form during the tournament could have lasting consequences."They should be making sure that the services they provide are high quality and not too expensive, because the people who are riding them are going to form an impression of those transit agencies — and there's a chance to really prove that they can provide a good service," Freemark said.Opportunity meets realityYet attracting new riders may prove easier than accommodating them.The World Cup's 104 matches will unfold across four time zones and thousands of miles, placing enormous demands on transportation networks already operating close to capacity.Ground transportation companies are eager to capitalize on soaring airline costs, but many are also wrestling with higher operating expenses of their own, particularly fuel prices.That leaves operators balancing competing priorities: attracting new customers while avoiding disruptions or price increases that could alienate the commuters who rely on them every day.For intercity bus giant FlixBus, the tournament represents a significant growth opportunity.Together with sister brand Greyhound, the company operates one of North America's largest transportation networks and says demand between host cities is already accelerating, with some departures sold out and others filling rapidly.Ahead of the tournament, the company has invested heavily in new buses and technology while placing renewed emphasis on punctuality."What is critical here is every Flix experience needs to be a happy one. That's how we actually grow our business. And this is a great opportunity," said Flix North America CEO Kai Boysan."We will welcome all the new customers and we want them to see what a change we've done and what a great experience they're going to have."Boysan believes buses are well-positioned to benefit from frustrations increasingly associated with air travel."Airports are congested and the costs are rising. And clearly travelers are naturally looking for alternatives. And there we come into effect," he said.The price problemWhile operators hope to lure travelers away from planes, some transit agencies have faced criticism for sharply increasing fares during the tournament.Few examples generated more backlash than New Jersey Transit, whose train service between Manhattan and MetLife Stadium — venue for eight matches including the July 19 final — initially carried a round-trip fare of $150 for a journey that normally costs less than $13.NJ Transit argued that the increase was necessary to cover approximately $48 million in additional costs related to security, crowd management and World Cup operations.Public criticism forced a rethink.The agency subsequently lowered the fare to $98 after securing additional advertising revenue, while shuttle bus prices on the same route were cut to $20 from the originally proposed $80 after organizers arranged additional capacity through local school buses.Boston has also announced higher event-day transportation prices. Round-trip rail tickets between downtown Boston and the stadium hosting seven World Cup matches will cost $80, compared with the usual $20 to $30, while a bus ride will cost $95.The fare hikes have drawn criticism from politicians, including U.S. Senator Chuck Schumer."Charging more than 11 times the normal fare for a train ride is a ripoff, plain and simple. FIFA is making billions from this World Cup," Schumer said after the original New Jersey fare was announced."FIFA should cover the ride, not stick New York fans with the bill."FIFA has countered that high transit costs could encourage fans to seek alternative ways to reach stadiums and noted that comparable international sporting events have generally not required organizers to fund transportation impacts.Different approachesNot every city has opted for higher prices.In Los Angeles, riders heading to World Cup matches will pay standard fares."Our regular fare is $1.75, so people will be able to pay that," said Cheung. "We will honor all of the discounts we have."Philadelphia is going a step further.Fans attending matches in the city will pay just $2.90 to travel to the stadium by train and receive a free ride home, courtesy of tournament sponsor Airbnb.National rail operator Amtrak is also preparing for increased demand as supporters move between host cities throughout the month-long competition."We are fully committed to running a world-class railroad ... and ensuring our infrastructure is ready to accommodate new and returning guests," said W. Kyle Anderson, Amtrak's director of communications.For transportation providers across North America, the World Cup offers a fleeting but valuable chance to showcase what their systems can do.The tournament will crown a world champion on the field. Away from the stadiums, trains, buses and transit networks will be competing in a contest of their own — to convince millions of travelers that public transportation can be fast, reliable and worth returning to long after the final whistle.

Cabinet approves Rs 10,000 cr breather for airlines

Drones hit Kuwait airport after Iran and US traded strikes; IndiGo issues advisory

In response to escalating regional tensions, IndiGo Airlines has suspended all its services to and from Kuwait, following a drone strike impacting the airport's passenger terminal. This closure of Kuwait's airspace has led to considerable disruptions for travelers.

IndiGo shares fall as airline halts Manchester flights amid soaring operational costs

Shares of InterGlobe Aviation, the operator of IndiGo, fell more than 1% to their day's low of Rs 4,425 on the BSE on Wednesday after it suspended flights to and from Manchester from August 31, as prolonged airspace restrictions and rising operational expenses continue to weigh on long-haul services.The airline said the temporary suspension will lead to the return of one of the six Boeing 787-9 Dreamliner aircraft leased from Norse Atlantic Airways, which were brought in to support its long-haul international expansion plans.In a statement issued on Tuesday, IndiGo said ongoing international airspace constraints have significantly increased flight durations, while a difficult cost environment has made operations on the route increasingly challenging. As a result, services between India and Manchester will be paused from August 31, 2026.The carrier had inducted six Boeing 787-9 Dreamliners on damp lease from Norse Atlantic Airways in early 2025 as part of its strategy to accelerate entry into European markets before the arrival of its own Airbus A350 aircraft. The Manchester service was among the first long-haul routes launched under this initiative.According to the airline, a combination of geopolitical tensions in the Middle East, elevated aviation turbine fuel (ATF) prices, severe airspace restrictions and currency volatility pushed operating costs well above original expectations.Abhijit Dasgupta, Senior Vice President for Network Planning and Revenue Management at IndiGo, said the route had received a strong response from passengers despite the operational difficulties."We inducted these wide-body aircraft on a short-term basis to fast-track our connectivity to high-potential long-haul destinations such as Manchester and witnessed very encouraging demand response," Dasgupta said."Unfortunately, longer flying times due to airspace constraints coupled with dramatically escalating costs compelled us to take the decision to temporarily discontinue our India-Manchester services," he added.The airline stressed that the suspension is only temporary and reaffirmed its commitment to growing its long-haul international network. Dasgupta said the positive customer response had strengthened IndiGo's confidence in the long-term viability of the Manchester route and its wider international expansion plans.IndiGo also said affected passengers will be notified in advance and assisted with alternative travel options or refunds, wherever applicable. The airline clarified that all of its other long-haul international services will continue to operate as scheduled.IndiGo Q4 snapshotIndia’s leading airline by market share reported a net loss of Rs 2,536 crore for the fourth quarter of FY26, compared with a net profit of Rs 3,067 crore in the corresponding period last year. Revenue from operations, however, edged up 1% year-on-year to Rs 22,438 crore.The airline said its operational performance during the quarter was affected by disruptions linked to the ongoing conflict in the Middle East. Capacity, measured in available seat kilometres (ASKs), increased 3.4% year-on-year to 43.6 billion. IndiGo shares have fallen 20% in the last six months and about 17% in the last 1 year. Sensex, Nifty today: Catch all the LIVE stock market action here (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

'Unfavourable cost': IndiGo pauses flight from Mumbai to UK's Manchester

The airline will return one of its six Boeing 787-9 Dreamliner aircraft, which had been taken on damp or wet lease from Norse Atlantic Airways.

United Airlines flight makes U-turn after 4-hours in air over suspicious Bluetooth device name

A United Airlines flight from Newark to Spain made an unexpected U-turn after a passenger's Bluetooth speaker, named "BOMB," triggered a security scare. The teenager responsible had reportedly forgotten about the name. Authorities evacuated the plane and inspected it thoroughly, causing significant delays and passenger concern.

ATF prices cut for international airlines, commercial LPG prices up by Rs 42

Public sector oil companies have reduced aviation turbine fuel (ATF) prices for international flights by nearly 27%, providing relief to airlines and travelers. However, commercial LPG cylinder prices have seen an increase of Rs 42 due to volatile global energy costs and disrupted supply chains from West Asia.

ATF prices for international airlines slashed 27%

IndiGo soars 5% after Q4 results. What Goldman Sachs, Jefferies and others are saying

Shares of InterGlobe Aviation, the operator of budget carrier IndiGo, rallied as much as 5% to their day's high of Rs 4,634 on the NSE on Monday despite reporting a net loss of Rs 2,536 crore for the fourth quarter of FY26, compared with a net profit of Rs 3,067 crore in the corresponding period last year. Revenue from operations, however, edged up 1% year-on-year (YoY) to Rs 22,438 crore.The airline said its operational performance during the quarter was affected by disruptions linked to the ongoing conflict in the Middle East. Capacity, measured in available seat kilometres (ASKs), increased 3.4% YoY to 43.6 billion.Passenger traffic stood at 31.6 million during the quarter, marking a marginal decline of 1.1% from a year earlier. EBITDAR, excluding foreign exchange impact, stood at Rs 6,435 crore, down from Rs 6,862 crore in the corresponding quarter last year. The EBITDAR margin narrowed to 28.7% from 31%.IndiGo shares: Should you buy, sell or hold?Goldman Sachs maintained its Buy rating and target price of Rs 5,200, implying an upside of 18% from current levels. The Wall Street major said the airline did not provide full-year FY27 capacity guidance, while elevated costs continue to remain an overhang. Goldman Sachs highlighted that the broader Indian aviation sector, barring IndiGo, continues to face weak profitability and balance sheet stress. The brokerage has retained its valuation at 10x FY28 estimated EV/EBITDAR.Jefferies maintained its Buy rating but lowered its target price to Rs 5,380 (22% upside) from Rs 5,500. The brokerage said the airline delivered a weak but largely in-line performance in the fourth quarter and expects the near-term outlook to remain challenging amid elevated cost pressures. For the first quarter, IndiGo has guided for mid-teen growth in unit revenue, largely driven by higher pricing, with demand so far remaining resilient enough to absorb part of the cost increases. Jefferies believes operating conditions will remain difficult in the near term, though the environment is likely to be even more challenging for peers.Motilal Oswal maintained its Buy rating on IndiGo with a target price of Rs 5,600, implying an upside potential of 27%. The brokerage said that despite near-term challenges from Middle East airspace disruptions, elevated fuel prices, rupee depreciation and higher damp-lease exposure, it remains positive on the airline's long-term growth strategy.It believes IndiGo is well positioned to benefit from India's strong domestic aviation demand and steadily expanding international network. Looking ahead, Motilal Oswal expects a gradual normalisation of international operations, a reduction in Pratt & Whitney-related aircraft groundings, ongoing fleet additions, and the deployment of A321XLR aircraft on international routes to support an earnings recovery.JM Financial maintained its Add rating with a target price of Rs 5,000, noting that capacity growth remained subdued due to the Middle East conflict. IndiGo reported ASK growth of 3.4% year-on-year to 43.6 billion in Q4FY26 and has guided for 3-4% ASK growth in Q1FY27, with most of the increase expected to come from domestic metro and leisure routes.The brokerage expects this, coupled with mid-teen PRASK growth on a favourable base, to support a recovery in unit economics. Capacity was significantly impacted by the West Asia conflict, with around 18% of total capacity affected and more than 160 daily international flights disrupted in March 2026. However, the airline indicated that capacity recovered to around two-thirds of normal levels in May and expects full normalisation by the end of June. JM Financial also highlighted that the number of grounded aircraft remains in the 40s but is likely to decline to the 30s by year-end, which could provide a meaningful boost to both capacity and costs.Elara Capital maintained its Buy rating and target price of Rs 6,020, arguing that the stock's roughly 25% decline over the past six months due to flight disruptions, the Middle East conflict, higher crude oil prices and rupee weakness has created an attractive opportunity. The brokerage believes the market is overly focused on near-term challenges while overlooking the benefits of a prolonged industry-wide capacity shortage.It highlighted that domestic advance fares are up around 17% year-on-year, while international advance fares have risen nearly 40%. Elara also noted that IndiGo reported an adjusted profit of Rs 25 billion in Q4FY26 despite a non-cash foreign exchange loss of Rs 48 billion. Additionally, competitor capacity reductions have been deeper than IndiGo's, supporting the airline's market share gains and pricing power. While the brokerage has lowered its FY27 EBITDA estimate by 7% to account for higher crude oil and rupee assumptions, its FY28 estimates remain broadly unchanged.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

India’s domestic air traffic falls 4.2% in April amid weak demand and rising costs

Domestic air travel experienced a dip in April, with passenger numbers falling 4.2% from March and 3.47% year-on-year. Airlines faced headwinds from softer demand and rising costs, leading to network adjustments. IndiGo expanded its market share to 65%, while Air India Group saw a decline. Operational performance varied, with IndiGo leading on-time flights.

Air passenger traffic drops in April

New Delhi: Domestic air traffic declined 4.2 per cent to little over 1.38 crore in April compared to March amid multiple headwinds, including relatively softer travel demand.The latest data from aviation watchdog DGCA showed that carriers flew more than 1.38 crore passengers in April, 3.47 per cent lower than over 1.43 crore passengers carried in April last year.Also Read: Delhi airport, SpiceJet issue travel advisory: Bad weather likely to affect flight operationsThe decline is 4.2 per cent compared to the traffic of 1.44 crore passengers recorded in March."Passengers carried by domestic airlines during January - April 2026 were 575.49 lakhs as against 575.13 lakhs during the corresponding period of the previous year thereby registering an annual growth of 0.06 per cent and monthly growth of -3.47 per cent," DGCA said in its report for the month of April.Airlines have been facing multiple headwinds, including rising operational costs due to higher fuel prices and relatively slower demand.Amid the challenging scenario, carriers have also temporarily trimmed their network.The Directorate General of Civil Aviation (DGCA) data showed that IndiGo's market share rose to 65 per cent in April from 63.3 per cent in March while that of Air India Group fell to 24.7 per cent from 26.2 per cent.The market share of Akasa Air inched up to 5.8 per cent last from 5.4 per cent in March and that of SpiceJet declined to 3.4 per cent from 3.8 per cent during the same period.Also Read: India's domestic air passenger traffic grows 1.4 pc to 1,677.4 lakh in FY26: ReportIn April, state-owned Alliance Air's share shrunk to 0.3 per cent from 0.6 per cent in March.A total of 3,266 passenger-related complaints were received by scheduled domestic airlines in April and the number of complaints per 10,000 passengers carried for the month stood at 2.36, as per DGCA.In terms of On-Time Performance (OTP) in April, IndiGo topped the list at 88.5 per cent, followed by Air India Group (82.4 per cent), Akasa Air (81.4 per cent), Alliance Air (71.2 per cent) and SpiceJet (31.2 per cent).OTP is computed for ten major airports -- Bangalore, Delhi, Hyderabad, Mumbai, Chennai, Kolkata, Ahmedabad, Cochin, Guwahati and Lucknow.Last month, around 1.12 per cent of the flights were delayed by more than two hours.According to DGCA data, over 1.35 lakh passengers were affected by flight delays and airlines shelled out little over Rs 2.41 crore towards facilitation whereas 77,065 passengers were impacted by flight cancellations and in this regard, carriers paid Rs 2.04 crore towards compensation and facilities.A total of 641 passengers were denied boarding and the airlines shelled out Rs 57.65 lakh for compensation and facilities.