New Delhi, March 20 From sudden airspace restrictions to soaring fuel prices and high insurance premiums, airlines are grappling with increasing complexities in their operations in West Asia, which are already curtailed amid the escalating conflict in the region.
Airline officials and crew members said the situation is very dynamic, and there are many variables to consider when operating flights to the West Asia region.
On Thursday, the aviation watchdog, DGCA, asked airlines to avoid nine airspaces in the region and ensure robust contingency plans as part of safety risk assessments.
According to an advisory, which will be valid until March 28, the Directorate General of Civil Aviation (DGCA) has asked airlines to avoid the airspaces of Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Qatar, and the United Arab Emirates (UAE).
The regulator said that Indian airlines can operate flights over the airspaces of Oman and Saudi Arabia, subject to certain conditions. The carriers cannot operate below FL 320 or 32,000 feet within the airspaces of Saudi Arabia and Oman, located south of the segments, subject to certain conditions.
Regarding the nine airspaces, the DGCA asked airlines to "refrain from operating within the affected airspace at all flight levels and altitudes."
It added that any continued operations would be at the discretion of the operator based on their safety risk assessment.
"Operations to airports in the affected region, where other international carriers are currently operating, must involve robust contingency planning to cover all eventualities, as part of the safety risk assessments by the operators," DGCA said.
Since the conflict, involving the US, Israel, and Iran, started on February 28, there have been multiple airspace closures and restrictions.
A crew member said that there have been instances where aircraft bound for West Asia destinations had to hover for some time before landing due to sudden airport or airspace restrictions following attacks in the vicinity.
Officials also said that insurance premiums have surged since February 28, ranging from Rs 30 lakh to up to Rs 1 crore, depending on narrow-body and wide-body aircraft.
One of the officials said that there is now a kind of war premium, which is about Rs 30-40 lakh for a round trip operated with a narrow-body plane, while the quantum ranges from Rs 90 lakh to even Rs 1 crore for a round trip operated with a wide-body aircraft.
Also, the utilization of narrow-body aircraft, which were operating to and from the West Asia region, has come down significantly.
Another challenge is rising fuel costs as the ongoing conflict has pushed crude oil prices higher.
Jet fuel accounts for around 40 per cent of an Indian airline's operational costs, and the carriers have already started to levy fuel charges and surcharges to partially offset the spiraling expenses.
Air India and Air India Express have started levying a fuel surcharge of Rs 399 on each domestic flight ticket and also hiked the quantum for overseas flights from March 12.
From March 14, IndiGo is levying fuel charges ranging from Rs 425 to Rs 2,300, while Akasa Air has started collecting fuel surcharges ranging from Rs 199 to Rs 1,300 on domestic and international flight tickets from March 15. The amount varies for domestic and international flights.
In a recent report, credit rating agency Moody's Ratings said the West Asia conflict would squeeze airline profitability globally, as fuel costs, their second-largest expense, remain high and operational disruptions continue.
"While hedging provides a buffer for some, no airline is immune. Higher fuel costs will weigh on profitability across the board, with unhedged carriers and those with thinner margins facing the greatest immediate pressure," it had said.
According to the report, West Asia is IndiGo's largest international destination, accounting for about 18 per cent of its revenue.
"This exposure is mitigated by the airline's dominant position in India's domestic market, where it holds a 64 per cent market share and generates roughly 75 per cent of its revenue.
"IndiGo does not hedge and will face near-term pressure from increased fuel costs, longer flight times due to rerouting, and foreign exchange volatility. However, its shorter booking curve of about 30-45 days will likely allow it to pass through higher costs to customers over the medium term," the report had said.