Air India has cancelled around 2,500 flights to West Asia over the past three weeks and is currently operating only about 30% of its normal schedule in the region due to the ongoing Iran conflict, chief executive officer Campbell Wilson said in an internal communication to employees.

“The world, our region and our industry continue to contend with the impact of the ongoing conflict in the Middle East…the impact on Air India Group is significant given the usual scale of our operations to, and through, the Middle East,” Wilson said in the note.

“In the three weeks since the conflict started we have had to cancel around 2,500 flights to the region. As of today, we can operate only around 30% of our normal Middle East schedule because airports and/or airspace are closed, or are assessed to be beyond our safety thresholds,” he stated.

The disruption is beginning to have a financial impact on the sector, with jet fuel prices more than doubling, Wilson said. “Most of the impact will only hit us from next month,” he stated, adding that the airline has already imposed a fuel surcharge on new tickets to partly offset rising costs.

“Other flights to the UK, Europe and North America are being rerouted even further from the already longer flight paths we’ve been using since the Pahalgam event last year, consuming more fuel and adding more time,” he said.

He, however, flagged concerns over weakening travel demand amid broader economic uncertainty. “Not every customer is willing to pay higher airfares, so there is a limit to how high we can price before demand drops,” he said.

At the same time, the airline is seeing “pockets of new demand” in markets such as Europe and North America, where it is deploying additional flights, even as some global carriers cut capacity due to high fuel costs.

“Depending on how fuel costs, airfares and customer demand moves, we may also have to adjust. For now…we should continue to focus on safe operations, keep tighter-than-ever control of non-urgent or unnecessary expenditure, support each other and keep delivering great Air India service,” Wilson said.

He also acknowledged the operational challenges faced by staff, especially those “physically in the affected Middle East”, saying teams are “constantly monitoring and adjusting operations as the environment changes,” with safety remaining the “overriding priority”.

The CEO said Air India’s network and schedules have become highly volatile, but thanked employees across operations, airports, contact centres and flight crews for managing the disruption.