IndiGo and Indian Aviation Sector Impacted by Middle East Tensions and Rising Costs

The Indian aviation sector faces mounting challenges from geopolitical tensions in the Middle East, leading to over 500 flight cancellations by IndiGo between February 28 and March 3, 2026, due to airspace restrictions. IndiGo is particularly vulnerable, with 35-40% of its international capacity linked to the Middle East. Rising aviation turbine fuel prices, driven by a 9% crude oil price surge amid the crisis, and a nearly 9% depreciation of the Indian rupee further strain airline profitability, impacting costs such as aircraft leases and maintenance.