India’s top airlines have decided to reduce their domestic operations starting on June 1 for a period of three months due to the significant increase in Aviation Turbine Fuel (ATF) costs following the outbreak of the US-Iran war.According to media reports, Air India has temporarily reduced 22 per cent of its domestic flights as it struggles with the effects of rising fuel prices.Nearly 40 per cent of an airline’s operating expenses are covered by ATF.The decision was made two weeks after the Air India owned by the Tata Group reported a 27 per cent reduction in international flights due to airspace restrictions and more expensive jet fuel, which have increased operating costs for foreign industries.Every week, Air India conducts over 4,400 flights. There are over 3,600 domestic services and 800 international services.In a statement, Air India said, “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 route.”“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 be temporarily suspending routes which include Delhi-Chicago, Delhi-Newark, Mumbai-New York, Delhi-Shanghai, Chennai-Singapore, Mumbai-Dhaka, and Delhi-Male routes till August.According to data issued by Singapore Airlines Group in its annual financial report for 2025-2 on May 14, Air India’s loss for the fiscal year ending March 2026 was more than SGD 3.56 billion (more than Rs 26,700 crore).IndiGo, meanwhile, said it would reduce between 5 per cent and 7 per cent of its domestic operations.In the past, the occupancy levels have been lower in the months after school holidays. The airline will reduce operations starting on June 1 due to the expected drop in demand. Given that IndiGo runs 1,950 flights per day, even a slight percentage reduction results in a substantial number of cancellations, an airline source told media.The most recent changes to state-level jet fuel taxes have also affected the aviation industry. Maharashtra has also declared a temporary decrease to 7 per cent until November, while Delhi has lowered the VAT on ATF from 25 per cent to 7 per cent for a period of six months.