The decision by Air India to cancel nearly a hundred international flights through July marks the most tangible sign yet that the widening conflict with Iran is reshaping global aviation and energy markets. The state-owned carrier’s chief executive, Campbell Wilson, acknowledged in a staff memo that a “massive rise” in jet fuel costs, compounded by the closure of key airspace over West Asia, had rendered many overseas routes commercially unsustainable. The airline, already burdened by losses exceeding 22,000 crore rupees in the last financial year, has now trimmed schedules for April and May and will extend the cuts deep into summer.

Viewed from New Delhi, the move underscores a broader energy dilemma: India, which imports roughly sixty percent of its liquefied petroleum gas and nearly all of its aviation turbine fuel, finds itself squeezed by supply disruptions from the Strait of Hormuz and the broader Middle Eastern theatre. The government has responded by protecting household LPG supplies and holding domestic jet fuel prices steady, but this has shifted the pain elsewhere. Commercial LPG cylinders have risen by nearly a thousand rupees, hammering restaurants and small manufacturers.

For international flights, the cost of fuel has soared so steeply that even Air India’s long-haul routes have become loss-making, a predicament echoed across the region. In Dubai, travel agents report that fares for Indian expatriates are climbing sharply, with airlines warning of further increases and potential frequency reductions if the crisis persists. The knock-on effects are now being felt from the Gulf to South Asia.

Analysts in London note that the situation resembles a cascading failure: airspace restrictions force longer, more fuel-intensive flight paths, which in turn drive up operating costs, which are passed on to passengers, dampening demand and tightening capacity. For a carrier already struggling to recover from decades of financial mismanagement, the timing could not be worse. Forward-looking projections remain grim.

With no diplomatic off-ramp visible in the Iran conflict and the Strait of Hormuz still a chokepoint, the price of crude and refined products is likely to stay elevated through the third quarter. Unless alternative supply routes open or domestic fuel subsidies are extended to international aviation, more airlines may follow Air India’s lead, shrinking connectivity for a diaspora that relies heavily on affordable flights between the Gulf and the subcontinent.