Foreign carriers take a record share of India’s international flights as Air India pulls back from long-haul

The Iran war and the ensuing fuel shock are jolting India’s international aviation model. Air India is pulling back from long-haul routes; foreign carriers — European, Asian, and Gulf alike — are moving fast to fill the gap; and the country’s dependence on foreign hubs for westbound traffic is deepening rather than easing.

By the numbers: Foreign airlines’ share of scheduled international flights from India rose to 58.4% between March-May from 51.2% a year earlier, while Air India scheduled 6.4k international flights from India, down 17.5% y-o-y, Reuters reports. Dubai, Doha, and Abu Dhabi have long acted as one-stop connectors for Indian passengers flying to Europe, North America, and Africa — and despite the war, that model is stressed rather than broken.

Where the share is moving

European and Asian networks are seeing the first gains. Swiss Air scheduled 247 flights from India in March-May, up 39% y-o-y, while KLM scheduled 294 flights, up 19.5%. Cathay Pacific scheduled 588 India-Hong Kong flights, up 19%, as some India-origin passengers who earlier connected through the Middle East shifted to Hong Kong for US travel. Emirates kept its India-origin schedule steady at 2.2k flights.

The shock is not India-specific. Bloomberg’s analysis of Flightradar24 data showed daily international widebody flight volumes across 21 major airlines fell to around 2.1k flights a day after the war began, from about 2.7k before the conflict. Middle East carriers lost 56% of their Asia operations, or more than 5k flights, while Western airlines added 677 flights to Asia and captured around 12% of the lost capacity, aviation expert Ajay Awtaney tells EnterpriseAM.

But the rerouting doesn’t solve India’s aviation problem. “Instead of going through Dubai or Doha, some passengers may go through Frankfurt, London, Paris or Amsterdam,” Awtaney says. “So, from a passenger point of view, yes, there may be options. But from an Indian airline point of view, the traffic is still not necessarily staying with Indian carriers.”

Why Air India is bearing the brunt

The shift follows Air India’s plan to cut about 100 international flights a day for three months from June. Air India’s scheduled India-US flights fell 77.4% y-o-y in March-May, while Europe flights declined 5.1%. Some US routes now take nearly five hours longer due to airspace restrictions, hurting non-stop long-haul economics. The airline has suspended Delhi-Chicago and reduced several US services for June-August, after earlier stopping Delhi-Washington and Bengaluru and Mumbai-San Francisco routes.

Fuel is the sharper margin risk: Jet fuel rose to USD 162.89 / bbl in the week ending 8 May from USD 99.40 / bbl at end-February. Airlines either pass higher costs through fares — hitting demand — or absorb them and take the hit on margins. “It becomes a very difficult situation, especially when the same flight is also taking longer because of rerouting,” Awatney said, citing a recent Delhi-Germany flight that took 12 hours instead of nine after the aircraft had to fly out through Gujarat and skirt the Middle East. ICRA estimates that Indian aviation could post a net loss of INR 170-180 bn in FY 2026, with fuel accounting for 30-40% of airline operating expenses and 35-50% of operating costs linked to the USD.

India’s bigger constraint is fleet depth. Awtaney said India has about 50 or fewer widebody aircraft capable of flying long-haul routes, while Middle East hub carriers such as Emirates operate hundreds of long-haul aircraft built around transfer traffic. “There is not enough capacity built in India yet to discourage people from traveling via the Middle East. So, that dependence will continue for a few more years,” he said.

India’s airport strategy is moving in the right direction — Delhi and Mumbai are being positioned as stronger hubs, and Air India and IndiGo have more aircraft on order. But a hub needs more than terminal capacity: it needs widebody aircraft, coordinated flight banks, transfer infrastructure, bilateral rights, interline depth and enough long-haul routes to retain traffic that currently flows through Gulf and European hubs.

The Gulf still holds

The Gulf remains central to India’s outbound market despite the near-term shift to European and Asian alternatives. Emirates, Qatar Airways and Etihad Airways have added Indian capacity over the past 18 months, while Dubai, Doha and Abu Dhabi remain key one-stop hubs for Indian passengers traveling West. Air India’s first round of cuts has spared the Gulf; the next test is whether Indian carriers can hold that corridor capacity if fuel costs stay elevated.

“I would still look at this as a short-term disruption rather than a permanent shift,” Awtaney says. “These carriers have not given up on being global hubs. Once the situation stabilises, they will come back strongly, and they will probably use pricing also to bring traffic back through Dubai, Doha and Abu Dhabi.”

Why it matters: The fuel shock is redistributing India-origin international traffic, not just cutting Air India’s schedule. If Indian carriers pull back while European, Asian and Gulf carriers hold or add capacity, India’s outbound growth stays tied to foreign hubs. The corridor test is whether the next round of cuts stays limited to long-haul routes or starts hitting Gulf and onward-connectivity capacity Indian carriers have spent two years building.

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