Fresh data from aviation analytics firm OAG show that total scheduled seat capacity to, from and within India fell 4.7 % year-on-year in July 2026, the steepest monthly contraction since post-pandemic recovery began. The decline is driven almost entirely by the Air India Group, which has removed more than 1.1 million seats—roughly one fifth of its July 2025 supply—after rerouting costs soared because West Asian airspace remains volatile. International capacity shrank 4.8 % to 7.6 million seats, hitting corporate itineraries hardest on Europe and North-America routings where Air India has cut frequencies or consolidated services. Domestic supply slipped 4.6 %, with Air India Express and SpiceJet also trimming schedules to cope with record jet-fuel prices and aircraft groundings. Market leader IndiGo held capacity flat, cushioning some of the impact, while nimble entrant Akasa Air grew 7.4 %. For travel managers the numbers translate into tighter inventory and rising fares through at least August, when Air India plans to restore only part of the shelved flying. Fare-forecasting tools already show double-digit month-on-month rises on Delhi-London and Mumbai-New York for late-July departures. Companies with fixed-date projects in Europe or the US are therefore advised to block seats early or route through Gulf hubs served by carriers less exposed to Iranian overflight detours. Capacity cuts also ripple downstream: airport slots are being temporarily redistributed, and ground-handling providers at metros such as Delhi and Mumbai report fewer turnaround opportunities, squeezing revenue just as they invest in new biometric processing equipment mandated by regulators. Air India management says the reductions are “temporary and targeted” and emphasises that wide-body fleet refurbishments remain on track for a 2027 completion. Yet analysts warn that if West Asian airspace instability becomes prolonged, the flag-carrier’s ambitious expansion plan could face further delays, complicating India Inc.’s global mobility budgets well into next year.
Source: The Financial Express
