India Pakistan conflict – Indian airlines stare at a loss of Rs 30 crore daily amid India-Pakistan conflict: Report

As flight operations remain suspended at a dozen airports due to tension between India and Pakistan, Indian aviation players IndiGo, Air India, and SpiceJet are set to face Rs 30 crore revenue losses per day, says a report by HSBC.   

The HSBC Global research report says IndiGo has cancelled close to 170 flights, Air India group cancelled around 115 and SpiceJet cancelled around 35 flights. These also include around 14-15 international flights to/from Thailand, Sharjah, Abu Dhabi, Dubai and the UK.

The flights have been suspended since May 7 with the launch of Operation Sindoor by the Indian government on terrorist camps in Pakistan and Pakistan-Occupied Kashmir. The flights on select domestic sectors remain suspended till May 10.

“On the basis of current cancellations, 8.5% of Indigo’s capacity (seats) will be impacted while Air India will have an impact on 18% of its capacity and SpiceJet 26%,” it said.

In terms of financial impact, the report said that it is not easy to calculate since there are a lot of moving parts such as how profitably these airlines can deploy this spare capacity elsewhere, how these cancellations will impact transit traffic and so on.

“But all else equal, we calculate revenue loss of Rs 16.6 crore and an EBIT loss of Rs 7 crore for IndiGo, revenue loss of Rs 2.3 crore and EBIT loss of Rs 1.5 crore for SpiceJet and revenue loss of Rs 10.5 crore and EBIT loss of Rs 5 crore for Air India on a per day basis,” it added.

The Indian hotel industry could also suffer losses due to these disruptions, especially because this is the peak holiday season in India. The major disruption could be from the loss of inbound international traffic.

“Revenue from inbound international tourism accounts for almost 10% of the Indian Hotels Company Limited (IHCL) total revenue and about 15% at Ventive Hospitality. On our calculation, everything else being equal, Indian Hotels could face EBIT losses of around Rs 1-1.5 crore per day and Ventive Hospitality could face per day losses of Rs 50 lakhs on the loss of inbound international tourism,” it said.

Airlines have issued an advisory to passengers regarding flight disruptions due to the ongoing situation, while offering a complete one-time refund or rescheduling of flights at no extra cost. Even online booking platforms are offering free cancellation or changes in dates to customers.

Nishant Pitti, Founder and Chairman, EaseMyTrip, said that with escalating tensions between India & Pakistan, travellers are urged to stay aware.

“We advise all our customers to exercise utmost caution and stay updated on official travel advisories before planning trips to sensitive regions,” said Pittie.

The military strike comes after a terrorist attack in Pahalgam, Jammu and Kashmir, on April 22, in which 26 civilians, including one Nepali national, were killed by Pakistan-based militants.