IndiGo has warned that the Iran war, and the consequent surge in crude oil prices, is set to weigh on travel demand during the summer season, even as airlines pass on higher expenses to passengers.
The budget carrier, which enjoys over 60% market share in India, signalled that its international summer schedule remains fluid. Domestically, it’s still recovering from significant operational disruptions that forced a scale-back in December.
“There is a very material escalation in operating costs, with fuel and forex-related costs expected to continue to increase substantially,” an IndiGo spokesperson said in a statement on Tuesday.
IndiGo warnings come even as an escalating Iran war continues to rattle global crude oil markets and complicates flight paths. The aviation industry is grappling with a “triple threat” of elevated fuel prices, soaring insurance premiums, and logistical complexity from airspace closures. For Indian carriers, aviation turbine fuel typically accounts for approximately 40% of operating expenses.
To mitigate the squeeze on margins, IndiGo began levying a fuel surcharge ranging from ₹425 to ₹2,300 on 14 March. Peers including Air India, Air India Express, and Akasa Air, have followed suit with similar levies.
“This and other fare increases required will have an effect on demand,” the IndiGo spokesperson said, adding that the airline will “recalibrate capacity accordingly” based on how the geopolitical situation evolves.
On Tuesday, shares of IndiGo operator InterGlobe Aviation Ltd. rose 5.18% to ₹4151.15 apiece on the BSE even as the benchmark Sensex ended the day 1.89% higher at 74,068.45 points.
