The Iran war was not the map rearranging war only. In 3 months it re-wrote Indian aviation. The world's initial response to the U.S. and Israeli air strikes against Iran on February 28, 2026, was focused on the oil markets and the Strait of Hormuz. Crude then climbed over $125 per barrel, jet prices jumped from $85-$90 per barrel to as much as $150-$200 per barrel, and airlines the world over, including Qantas, SAS and Air New Zealand, struggled to raise fares, or even provide financial guidance. However, in India, something structurally more intriguing has occurred; the youngest and smallest airline has started adding more flights as all other major carriers of the world have been slashing their flight numbers.

The total number of flights operated by the four major airline companies in India fell by almost 6 per cent during March and April as compared to the previous year. IndiGo, the country's largest airline, cut back on 4.5 percent of flights, Air India's full-service airline by 7.5 percent and its low-cost arm Air India Express by 17.1 percent. Carriers have been forced to cancel flights and reroute some international air routes and have been facing problems as they were unable to fly on Pakistani air route.

In that context, Akasa Air did something that other airlines could not: it expanded. Akasa grew by 13.2 per cent during the same period, having run more than 10,100 flights in March and April 2026, which is almost 4.7 per cent of all domestic and international flights carried by Indian airlines during the period. That's a significant number for a carrier just starting commercial service in August 2022.

The current crisis is bad from an economic perspective. Fuel once accounted for 30-40% of an airline's total operating costs, but now costs represent 55-60% of the airline's total operating costs and it has little maneuverability. The issue has a domino effect: as fuel costs go up, so do fares, as fares go up, demand goes down, as demand goes down, load factors go down and so do some routes become even more marginal to operate.

In normal times, ATF costs almost 40% of an airline's operating costs. Those conditions are not the ones that prevail any longer. Brent crude has risen over 50 percent in the past three months amid rising concerns of continued supply disruptions across energy markets worldwide. Airlines are facing not just a spike in fuel prices but also a reset in cost assumptions, which could prove to be a structural reset that does not rapidly get undone.

The Federation of Indian Airlines (FIAC) has appealed to the government to urgently intervene and rescue the aviation sector, which is facing "dire condition" owing to the soaring price of petrol and diesel and the disruption due to the Iran conflict, which has resulted in heavy operational losses and capacity cuts of the airlines.

The government has acted, albeit gingerly. Since the Iran war, India has declared a series of measures – rebates on landing and parking charges, finding ways to control the hike in jet fuel prices and cuts on tax on fuel for flights from Delhi and Mumbai. However, oil marketing companies already have losses in selling petrol and diesel domestically, and the loss per litre of petrol and diesel now is of the order of ₹14 and ₹18 respectively, respectively, leaving the government with little appetite to absorb fuel subsidy on the aviation sector's account.

The pressure is not lifting as of today, 30th May 2026. India's airlines have requested state-owned oil refiners to delay the increase in prices of jet fuel for domestic air travel till the end of the conflict in West Asia, a move being considered by the refiners, which is also under discussion with India's oil and gas ministry.

The big carriers have reacted in no uncertain terms. Air India will slash up to 22 per cent of its domestic operations between June and August and IndiGo is seeing a cut of 5 to 7 per cent in its domestic operations and 17 per cent in its international operations. Air India has announced on Monday that they are cutting down around 250 weekly international flights for June, July and August amid the prevailing airspace restrictions and burgeoning jet fuel prices, which are impacting the viability of their operations.

These are big confessions. Air India and IndiGo have a duopoly of sorts in India's aviation market, controlling approximately 90 percent of the country's aviation capacity. If both are retracting at once, the retracting will create a vacuum.

It is that vacuum which is Akasa Air's home. Currently, the carrier operates 38 Boeing 737 MAX aircraft, has a revenue of ₹46.36 billion ($490 million) for FY 2024–25 and serves 31 destinations. Those numbers make it a legitimate threat and not a footnote. However, the reality is different the airline reported a loss of ₹19.83 billion ($210 million) in FY 2024–25. In other words, it's a carrier investing heavily to expand in a market that has just gotten a lot more expensive to play in.

The question is whether Akasa's growth in this crisis is a true strategic gamechanger or a stopgap that relies on factors favoring the company as long as they like.

The answer is likely, both. With fewer planes in the fleet, the airline should be able to redeploy planes quicker, there are no long-haul international routes using thousands of extra litres due to detours through Iranian airspace. Akasa has kept its long-haul routes to a minimum, with no flights through Iranian airspace, and operates a modern fleet of Boeing 737 MAX aircraft, meaning that its domestic operations have been less affected by the crisis. Unlike IndiGo and Air India who have legacy obligations to international routes which are now sucking money, Akasa's route mix is slanted towards domestic, which has an impact on fuel costs, but not as much as transatlantic and Europe-bound routes.

Data from the government revealed that Akasa accounted for 5.4 percent of the passengers carried in March, while IndiGo had 63.3 percent and Air India Group (which includes Air India) had 26.2 percent. The market share gap is massive, but it's the trend that's important. Eighteen months ago, Akasa wasn't part of this conversation.

The airline currently has a fleet of expanding Boeing 737 MAX jets and announced a 22 percent increase in year-on-year network capacity for its Summer 2026 timetable, which will provide greater connectivity on key domestic and international markets. That plan was worked out prior to the Iran strikes. That it is, for the most part, doing just that, while others pull back, will mean that the airline will hold its route slots, brand real estate and passenger habits that will be hard to change when things get back to normal.

The long game is even loftier. The airline is ready to expand its wings and is mulling on a few new routes including Kenya, Egypt, Ethiopia and other countries, and the CEO has said that they intend to announce flights to Sharjah soon. The expansion strategy will see Akasa Air increase its share of international travel capacity to approximately 30 per cent of total ASKs by March 2027, from the current 20 per cent.

The airline has already ordered 226 Boeing 737 Maxs, which will be delivered over the next few years. On any schedule other than right on time, Akasa will have scale within five years. There's a problem there as in, it isn't a problem, but a ₹19.83 billion annual loss on top of the historic highs for fuel costs is a posture that needs a lot of patience or some betterment in the macro environment sooner rather than later.

The side of the equation that concerns the passengers is moving at least nominally towards Akasa. On both domestic and international routes, the average increase was approximately ₹1,500 and ₹15,000, respectively. Airlines have decided to charge between ₹200 and ₹950 for the same and there are possibilities of additional 5-10 percent hike in the fares, if the trend continues. While higher fares negatively impact demand, they also result in more value per seat sold, which is good for the lean operators with lower costs.

There is a parallel of interest internationally. Southeast Asian and Oceania carriers are imposing new charges or cutting back on routes, and from South Korea to Australia, jet fuel is in short supply and supply chains are struggling. Energy analysts have called the closure of the Strait of Hormuz, which is regarded as a "chokepoint" for global energy transport, "the largest oil supply disruption in history" due to the war in Iran. In that context, the aviation industry in India is facing the same headwinds as everyone else, just with the added layer of the dual closures of airspace over Iran and Pakistan, leaving virtually every western international flight from the subcontinent requiring detours.

The irony is that this dual restricted environment which has been hobbling large Indian carriers has hardly an impact on Akasa's current network. The airline does not fly most of the long-haul routes which these detours impact. The competitive exposure of its is to be mostly outside the blast radius.

That may not be a fit for Akasa for the rest of time, however, since as it endeavors to reach East Africa and international routes, it too will be subjected to the same costs its rivals suffer today. However, in the present hour of 2026, the biggest factor as to why Akasa is expanding while other airlines aren't is the structural disconnect in where the impact of this war is the most severe and where Akasa operates.

Two commercial passenger aviation operators, namely, IndiGo and Air India Group, have accounted for almost 90 per cent of the domestic capacity in India. For years, the supremacy has seemed untouchable. The Iran war did not provide Akasa's opportunity, but it did hasten it - the crisis has given India's youngest carrier an opportunity in three months, in the normal course of events, it would have taken years to do so.