Tata Group-promoted Air India plans to temporarily suspend all flights to certain international destinations such as Chicago as elevated Aviation Turbine Fuel (ATF) prices continue to pressure overseas operations, industry sources told businessline.

Accordingly, the development comes amid indications that discussions between airlines and oil marketing companies (OMCs) on measures to ease international jet fuel prices have failed to yield any material outcome.

When contacted, Air India did not respond to queries sent by businessline.

Speaking to businessline, sources pointed out that the proposal related to the crack spread mechanism for setting international ATF prices has not been accepted by OMCs.

The absence of any immediate pricing relief sources said has increased pressure on airlines operating ultra-long and long-haul international sectors, where fuel costs account for a substantial portion of overall operating expenses.

A senior Air India executive said, on condition of anonymity, that the airline has been engaged in discussions on possible fuel pricing relief for several weeks.

“We have engaged with them for many weeks and discussed many options, but no material progress has been made so far and we cannot wait any longer, so yes, there will be some frequency cuts,” the official said.

Consequently, Air India is understood to have evaluated additional cuts across parts of its overseas network for June, July, and August as part of a broader rationalisation exercise aimed at reducing losses on unviable long-haul sectors.

According to industry insiders, apart from Chicago, the airline is also reviewing operational viability on other routes where profitability has come under pressure due to higher fuel prices and longer flying durations caused by airspace restrictions.

Notably, businessline was the first to report earlier this month that the airline had reduced flight frequencies across several key international routes for May, with reductions of 5 per cent on some routes and up to 25 per cent on others.

In terms of this month’s flight rationalisation, North America operations were reduced by around 20 per cent, while frequencies on select European, Australian, and Southeast Asian routes were moderated.

The sharpest reduction was seen in Australia, where services on the Melbourne and Sydney routes were reduced, while select European destinations also witnessed lower frequencies as part of the network recalibration exercise.

Besides, Southeast Asian operations were reduced by around 10 per cent during the month.

The combination of higher international jet fuel prices, along with geopolitical disruptions in West Asia, currency depreciation, and longer flying routes due to airspace restrictions, has significantly affected the profitability of long-haul international sectors, sources said.

Furthermore, industry observers said that the prolonged closure of certain air corridors has increased block time on multiple routes, resulting in higher fuel burn, crew costs, and aircraft utilisation challenges for airlines operating international networks.

Last week, while addressing a townhall meeting at Air India headquarters here, Air India CEO Campbell Wilson said that the airline had undertaken rapid network optimisation to redeploy capacity more efficiently, strengthened its India-Europe and India-Far East presence, and deepened synergies with Air India Express by eliminating overlapping routes and improving network efficiency.

Meanwhile, industry sources said several airlines are increasingly focusing on preserving operational cash flows by prioritising routes that continue to generate sustainable demand and revenue visibility.

Globally too, airlines have undertaken selective international capacity rationalisation amid rising fuel prices and geopolitical uncertainty.

In addition, several foreign carriers have already announced frequency cuts or network adjustments across long-haul markets.

Published on May 12, 2026