Insurance companies are planning to increase war-risk premiums for airline fleets operating to West Asia, which could lead to higher airfares as carriers pass on the additional cost to passengers.
Industry estimates suggest the revised premiums could add ₹30-40 lakh to the cost of operating a narrow-body aircraft on West Asia routes and around ₹90 lakh for a wide-body aircraft per round trip.
This could translate to additional costs of ₹20,000 per passenger on narrow-body flights and about ₹30,000-35,000 on wide-body services, based on typical passenger loads.
The conflict has also pushed up other operating costs, including a 30% surge in jet fuel prices, which accounts for around 40% of airline operating costs.
Airline schedules and aircraft utilisation have also been disrupted due to airspace restrictions, operational uncertainties, and sudden route changes, affecting about 20% of flights for every airline operating in the region.
