Whalesbook
Air India announced on Tuesday, May 12, 2026, that it will continue its suspension of flights between Tel Aviv and Delhi through June 30. This extends the operational halt beyond the previously communicated end-of-May deadline, a move driven by ongoing uncertainty in the West Asian region. The decision heightens travel costs for passengers, a significant concern for the estimated 40,000-plus Indian nationals residing in Israel who need to travel for personal or professional reasons. Israeli carriers like El Al, IsraAir, Arkia, and Air Haifa are reportedly maintaining limited operations under enhanced security protocols, but international options remain scarce.
Wider Aviation Impact
This situation reflects broader challenges across the aviation industry, which is already facing increased operational costs. Global air cargo demand fell 4.8% year-over-year in March 2026 due to Mideast disruptions impacting logistics. Jet fuel prices have climbed sharply; by April 2026, they were up 18.2% from a year earlier, a major cost for airlines which typically accounts for 30-40% of operating expenses. In the U.S., fuel costs per gallon rose 31% in March 2026, partly due to the Iran war and closure of the Strait of Hormuz. These rising costs, coupled with longer flight paths needed to avoid restricted airspace over Iran and Pakistan, are forcing airlines to increase fares and surcharges. Jet fuel prices for international flights in May 2026 were reportedly 63% higher than before the recent conflicts.
Many carriers have responded by suspending or reducing services. Lufthansa Group has extended its Tel Aviv route suspensions until June 30, while Delta, United, and Air Canada have similar pauses until September. The Indian aviation sector faces significant financial strain, with projected net losses of Rs 170-180 billion for FY2026, driven by these geopolitical challenges and rising expenses.
Financial Strain on Air India and Others
For Air India, the disruption means significant revenue loss from cancelled flights and a 70% cut to its Middle East schedule, leading to operational strain. Reports indicate Air India could face losses over $2 billion for the financial year ending March 2026. The airline's reliance on Mideast routes for transit and destinations makes it vulnerable to geopolitical shocks. This is worsened by higher fuel costs and a weakening rupee, which raises expenses paid in U.S. dollars, such as aircraft leasing and maintenance.
The Directorate General of Civil Aviation (DGCA) has also issued safety advisories to Indian operators, warning them to avoid high-risk airspaces in West Asia due to advanced military systems and potential errors. This adds another layer of operational caution. Some carriers, especially in the U.S., lack broad fuel cost protection, making them more exposed to sustained high fuel prices.
Outlook for Travel Demand
While industry leaders remain confident about aviation's long-term recovery, the immediate outlook for routes like Tel Aviv is uncertain. Prolonged conflict could keep energy prices high, dampening consumer travel demand and straining airline profits, especially for those without fuel cost protection. The current instability discourages advance bookings for international travel due to ongoing Mideast tensions and rising fares. Experts predict Indian airlines may cut summer flight capacity by up to 30% because of weak demand and higher operating costs. The DGCA continues to monitor the situation closely.