Mumbai/New Delhi, March 22 The Air India Group has been significantly impacted by the Middle East conflict, and the financial impact is "still unfolding," according to Air India CEO Campbell Wilson, who has also emphasized the need for stricter control over unnecessary expenses.
Loss-making Air India and Air India Express have been grappling with operational disruptions, similar to other airlines, since the start of the conflict involving the US, Israel, and Iran on February 28.
"In the three weeks since the conflict began, we have had to cancel around 2,500 flights to the region. As of today, we can only operate around 30 per cent of our normal Middle East schedule because airports and/or airspace are closed, or are deemed to be beyond our safety threshold," Wilson said in a message to staff on Friday.
The airline's flights to the UK, Europe, and North America are also taking longer routes due to airspace restrictions in the region, resulting in increased fuel consumption.
Wilson stated that the impact on the Air India Group is significant, given the scale of its operations to and through the Middle East.
According to Wilson, the financial impact of this crisis is still unfolding, although the spot price of jet fuel has more than doubled, most of the impact will only affect the group from next month.
Given economic uncertainties, he said it is not certain that customers or companies will be as willing to travel as they were prior to the conflict, and may choose to stay put for a while.
"For now, though, we should continue to focus on safe operations, maintain stricter control over non-urgent or unnecessary expenses, support each other, and continue to deliver great Air India service to our customers," the MD and CEO of Air India said in the message.
Air India, Air India Express, IndiGo, and Akasa Air have imposed fuel surcharges and increased ticket prices due to rising jet fuel costs caused by the conflict.
Wilson also mentioned the imposition of fuel surcharges, saying that "not every customer is willing to pay higher airfares, so there is a limit to how high we can price before demand drops."
"There will be pockets of new demand, such as we're seeing on -- and deploying additional flights to -- some European and North American cities, but already airlines in some parts of the world are reducing some flights due to high fuel prices.
"Depending on how fuel costs, airfares, and customer demand move, we may also have to adjust," he added.