Indian Airlines' Profitability Hit by High ATF, Weak Rupee, Geopolitical Tensions

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Indian Aviation Faces Headwinds: Soaring ATF, Rupee Dip, Geopolitical Tensions Hit Profits

Air India Express flight

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Moneycontrol•04-03-2026, 15:08

Indian Aviation Faces Headwinds: Soaring ATF, Rupee Dip, Geopolitical Tensions Hit Profits

•Indian aviation industry grapples with high ATF prices, rupee depreciation, and geopolitical tensions impacting profitability.
•ATF prices remain elevated at Rs 96,638 per KL in March 2026, significantly higher than pre-Covid levels, forming 30-40% of operating costs.
•Rupee's 9% depreciation in FY26 increases dollar-denominated expenses like aircraft leases, maintenance, and foreign crew salaries.
•Middle East tensions and Iran war cause flight cancellations, rerouting, and impact international operations for IndiGo, SpiceJet, and Air India.
•Grounded aircraft situation is improving, from 20-22% (Sept 2023) to 13-15% (Feb 2026), aiding supply-demand balance.

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