Ranit Kr. Singh , New Delhi — Air India announced Wednesday that it will reduce its domestic flight operations by approximately 22% starting next month to mitigate the severe financial impact of skyrocketing jet fuel prices. The decision follows a recent 27% cut to its international schedule and comes on the heels of a record annual loss of over $2 billion for the 2025-26 fiscal year. The airline, which operates around 3,600 weekly domestic flights, stated that affected passengers will be offered re-accommodation, complimentary date changes, or full refunds.

The operational downscaling is heavily driven by geopolitical tensions, specifically a US-Israeli attack on Iran that triggered a sudden surge in global crude and aviation turbine fuel prices. Because fuel constitutes up to a quarter of an airline's operating expenses, the spike has severely strained carriers worldwide. Air India’s operational challenges have been further compounded by an ongoing airspace ban by Pakistan, which forces Indian carriers to take longer, more expensive detours for western routes.

In tandem with the parent carrier, low-cost subsidiary Air India Express will also reduce its domestic operations by roughly 10% next month as it gradually resumes its vital routes to West Asia. Air India stated it will closely monitor market demand and fluctuating operating conditions, intending to fully restore its flight frequencies as soon as global energy markets and regional geopolitical conditions stabilize.