{"id":88149,"date":"2026-03-30T00:00:00","date_gmt":"2026-03-30T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/mena-india\/?p=88149"},"modified":"2026-03-30T10:23:11","modified_gmt":"2026-03-30T10:23:11","slug":"this-afternoon-war-driven-costs-ground-aviation-recovery","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/mena-india\/2026\/03\/30\/this-afternoon-war-driven-costs-ground-aviation-recovery\/","title":{"rendered":"THIS AFTERNOON: War-driven costs ground aviation recovery"},"content":{"rendered":"

Good afternoon, ladies and gents. <\/strong>It appears the aviation industry, India\u2019s CAD, and the INR remain in the crosshairs as the conflict in the Middle East enters its fifth week \u2014 oh, and kerosene is back. Let\u2019s dive right in.<\/p>\n

Watch this space <\/p>\n

<\/a> AVIATION<\/strong> \u2014 The Indian aviation industry stands to take a hit with net losses of up to INR <\/strong>180 bn (USD 2.2 bn) in FY 2026<\/strong>, according to a note (pdf)<\/a> released by ratings agency ICRA. The agency has lowered its outlook on the industry from stable to negative, citing higher fuel prices, longer flight paths due to rerouting, and increased airport charges as the war in the Middle East drags on.<\/p>\n

Why it matters: <\/strong>The downgrade highlights severe disruptions in the India-Gulf corridor, a vital route for India\u2019s international traffic. Since the conflict began, Indian carriers have scrapped 2.4k flights, a 72% drop<\/a> in scheduled services, placing immense pressure on carriers operating well below capacity. <\/p>\n


In numbers: <\/strong>Up to 50% of the industry\u2019s expenses are denominated in USD, leaving Indian carriers exposed to a declining INR. Fuel prices went up 5.7% in March, intensifying cost pressures, and the agency expects muted demand with projections of up to 3% domestic traffic growth in FY 2026. International traffic is projected to grow by up to 9%. <\/p>\n

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<\/a> EXPORTS<\/strong> \u2014 The government has launched an INR 4.9 bn (USD 52.5 mn) support package to cushion <\/strong>Indian exporters and stabilize vital trade flows<\/strong>, according to a statement<\/a> from the Commerce and Industry Ministry. The scheme \u2014 targeted at shipments to Gulf markets \u2014 seeks to protect export-linked jobs as the sector faces escalating logistics and ins. costs amid hostilities in the Middle East.<\/p>\n

What we know: <\/strong>The initiative offers risk coverage of up to 100% on shipments and partial reimbursement of logistics cost spikes \u2014 capped at INR 5 mn (USD 54k) \u2014 particularly focused on micro, small, and medium enterprises. It covers cargo already in transit, plus upcoming consignments destined to countries in the affected corridor including the UAE, Saudi Arabia, Kuwait, Israel, Qatar, Oman, Bahrain, Iraq, Iran, and Yemen.<\/p>\n

A dual shock: <\/strong>Exporters are facing pressures from both maritime and air cargo interruptions including rerouting, port congestion, higher ins. premiums, and emergency surcharges. Perishable goods and MSMEs are particularly vulnerable, with working capital stress rising as delays mount.<\/p>\n

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<\/a> DEFENSE<\/strong> \u2014 MALE gets more time:<\/strong> India has extended the bidding window on its INR 300 bn (USD 3.6 bn) medium-altitude long-endurance (MALE) drone procurement program until the end of May, Economic Times<\/a> reports. The program, which aims to sell 87 drones, is facing challenges from participating firms, which include Israeli companies Elbit Systems and Israel Aerospace Industries, on the back of the US-Israel conflict with Iran.<\/p>\n

More about the program: <\/strong>The final order will be split between the two lowest bidders in a 64:36 ratio, with the selected firms also receiving a 10-year maintenance contract. The tender requires local manufacturing of aerostructures and key components, along with engine assembly and testing in India, as well as indigenous production of electro-optical payload and satellite communication systems.<\/p>\n

Why it matters: <\/strong>India is a key customer<\/a> for Israeli defense exports, accounting for about 34% of Israel\u2019s arms exports between 2020 and 2024, making programs involving Israeli vendors sensitive to any disruptions affecting their delivery timelines or operational capacity. Saudi Arabia, Qatar, and Kuwait were among the world\u2019s top 10 arms importers in 2021-25, reflecting the scale of defense demand across the Gulf. <\/p>\n

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The big story abroad<\/p>\n

Tehran<\/strong> has signaled that it is <\/strong>ready to confront<\/a><\/strong> a land invasion by Washington<\/strong>, as 3.5k US troops arrive in the region. The Pentagon is reportedly prepping for weeks of ground operations in the Islamic Republic, which would likely be limited to targeted raids by special forces and infantry, rather than a full-scale invasion, US officials told The Washington Post<\/a>.<\/p>\n

US President Donald Trump wants to \u201ctake the oil in Iran,\u201d<\/strong> and indicated a willingness to seize Iran\u2019s key export hub of Kharg Island, he told the Financial Times<\/a>. Trump said that his \u201cpreference would be to take the oil,\u201d in a similar move to what his administration did in Venezuela.<\/p>\n

Pakistan is positioning itself as a broker for talks<\/strong>, signaling<\/a> its readiness to facilitate peace talks between Washington and Tehran. \u201cPakistan is very happy that both Iran and the US have expressed their confidence in Pakistan to facilitate their talks,\u201d the country\u2019s Foreign Minister Ishaq Dar said yesterday following discussions with his counterparts from Egypt, Saudi Arabia, and Turkey. <\/p>\n

Houthi strikes send ripples across the oil market: <\/strong>The entry of Yemen\u2019s Houthis into the fray pushed Brent up more than 3%<\/a> to USD 116.43 per barrel, putting it on track to hit a record monthly gain. The global benchmark is up around 60% since the beginning of the month. <\/p>\n

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Check out our full calendar on the web<\/strong> for a comprehensive listing of upcoming news events, national holidays, and news triggers.<\/p>\n","protected":false},"excerpt":{"rendered":"

Plus: Trade support kicks in as logistics costs rise<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2403],"tags":[2458,2402,2544,2847,2401],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-88149","post","type-post","status-publish","format-standard","hentry","category-what-were-tracking-today","tag-aviation","tag-enterpriseam-india","tag-exports","tag-logistics","tag-what-were-tracking-today","wpautop","entry"],"acf":{"mongo_id":"21688548-1067-456a-beef-7f0fc0f75ddc","order":"2","is_powered_by":false,"story_type":"4","photo_url":"https:\/\/ent.news\/2026\/3\/1385.jpg","photo_position":"above","homepage_title":"","full_issue_title":"THIS AFTERNOON: Fuel, fees, rerouting drag Indian airlines into losses","related_issue":[88147],"teaser":"Plus: Trade support kicks in as logistics costs rise"},"yoast_head":"\nTHIS AFTERNOON: War-driven costs ground aviation recovery - 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