New Delhi: Air India is cutting domestic and international capacity this summer, flying up to 5% fewer flights on domestic routes and nearly 40% less on international corridors compared with a year ago, as a depleted fleet, surging jet fuel costs, and war-related airspace closures squeeze the Tata Group carrier.
The airline and its low-cost subsidiary Air India Express together offered roughly 9.24 million domestic seats in April and May, down from 9.71 million a year ago, even as India's largest carrier, IndiGo, expanded domestic capacity 6% to 23.04 million seats and newcomer Akasa Air grew 9% to 1.63 million seats, according to data from aviation analytics firm OAG reviewed by Mint. Seats are a measure of capacity for airlines.
The move reflects pressures that analysts say have pushed Air India's network strategy into what one expert calls ‘survival mode’. Domestic jet fuel prices surged by over 94% between February and May, and airspace over Pakistan has been shut since April 2025. Subsequent closures over Iran, Iraq, and West Asia due to the war have forced longer flight times and steeper operating costs on international routes.
Aggravating the issue is a shrinking fleet: the Air India group operated around 258 aircraft in April–May, down 11% from a year ago, with Air India alone having some 21 planes grounded, double last year's figure, and Air India Express sitting with nearly 12 aircraft idle, almost three times the year-ago number, according to Gagan Dixit, senior vice president-Aviation, Oil and Gas, at Elara Capital.
Air India, Air India Express, IndiGo and Akasa Air are yet to respond to a questionnaire from Mint.
The FY26 annual report of Singapore Airlines, which has a 25.1% stake in Air India, states that Air India could report a $2.8-billion loss in the last fiscal. The Indian carrier is yet to declare its FY26 numbers.
Rivals fill the gap
IndiGo and Akasa both have more planes in the air compared with last year, he said. IndiGo’s operating fleet is up 6% to 366 aircraft this summer, while Akasa’s has risen nearly 30% to 38.
“Over the last 10-12 months, Air India at a group level has taken just 7 narrow-body aircraft deliveries from Boeing. On the other hand, IndiGo had 44 deliveries from Airbus, indicating that it is replacing the old fleet with more fuel-efficient planes to bring down costs and tap the market better. Akasa is having one plane delivered a month, on average, ramping up its fleet. Air India needs to look into the delivery of aircraft too, if it has to increase domestic presence,” Dixit said.
Aviation expert and chief executive of Pune-based Avialaz Consultants, Sanjay Lazar said Air India’s network planning ‘has gone into survival mode’ to protect ‘the more profitable routes’.
Lazar said the Air India group’s sharpest reductions were in tier II cities, where capacity is down by 12%. This reflected “Air India’s Wartime strategy” where the group is “preserv(ing) its premium traffic whilst avoiding competing head-on with IndiGo/Akasa in smaller regional markets.”
“This is true of the 25 December-26 April matrix that we have studied. Air India also pulled out some narrow bodies to deploy them internationally to Hanoi, Manila, etc.,” Lazar said.
Air India’s domestic capacity has also been affected by aircraft refurbishment, lease returns and redeployment of planes to international routes.
“It appears Air India Express suffered a drop of 7% or so, because of a variety of reasons. Phasing out of Air Asia aircraft, moving from Tier II & III routes to trunk routes (Delhi–Mumbai, Bengaluru–Delhi) and a few leisure destinations (Goa, Kochi, Port Blair),” he added.
Market share held
Lazar said Air India has managed to retain its market share at 27% as of April 2026, while focusing on ‘premium yields’, higher average revenue per passenger, rather than chasing volumes.
As of March-end, Air India group had a market share of 26.5% (domestic), according to data from the Directorate General of Civil Aviation.
Lazar said fleet transition phases across airlines are usually planned, including aircraft refurbishment, lease returns and retirements.
“We see the next two quarters of struggle for all Indian carriers and globally. It will be the last quarter of this year before the first green shoots of recovery show up, that too if the war ends soon,” he said.
