India’s top airlines have decided to reduce their domestic operations from June 1 for a period of three months due to the sharp rise in aviation turbine fuel (ATF) costs following the outbreak of the US-Iran war. Air India has temporarily reduced 22 per cent of its domestic flights as it grapples with the impact of soaring fuel prices, while IndiGo too has announced reduction in operations by 5-7 per cent.ATF accounts for nearly 40 per cent of an airline’s operating expenses. The decision comes two weeks after Tata Group-owned Air India announced a 27 per cent reduction in its international operations due to airspace restrictions and higher jet fuel prices, which have sharply increased operating costs for global airlines.Air India currently operates over 4,400 flights every week, including around 3,600 domestic and 800 international services. “In continuation of our previously announced adjustments to select international services between June and August 2026, we have temporarily rationalised operations on certain domestic routes during the same period, with a reduction in frequencies on select routes,” Air India said in a statement.“Air India will continue to monitor demand and operating conditions closely, with a view to restoring frequencies as conditions stabilise,” the statement added.The airline will temporarily suspend operations on routes, including Delhi-Chicago, Delhi-Newark, Mumbai-New York, Delhi-Shanghai, Chennai-Singapore, Mumbai-Dhaka and Delhi-Male till August.According to data issued by Singapore Airlines Group in its annual financial report for 2025-26 released on May 14, Air India’s loss for the financial year ending March 2026 stood at more than SGD 3.56 billion (over Rs 26,700 crore).IndiGo, meanwhile, said it would reduce 5-7 per cent of its domestic operations. An airline source said occupancy levels were usually lower in the months following school holidays and the airline would cut operations from June 1 in anticipation of weaker demand.Given that IndiGo operates nearly 1,950 flights daily, even a small percentage reduction would result in a substantial number of cancellations, the source added.The aviation industry has also been impacted by recent changes in state-level jet fuel taxes. Delhi has reduced VAT on ATF from 25 per cent to 7 per cent for six months, while Maharashtra has announced a temporary reduction to 7 per cent till November.