US-Iran conflict slashes Indian airlines' overseas traffic while foreign carriers gain
The war between the United States and Iran has caused Indian airlines to lose a large share of international passengers, with Air India Group down 35% and IndiGo down 15.4%, while carriers such as Emirates have seen modest growth.
International air travel involving India contracted sharply in the April-June period, with overall passenger numbers down 10.5% to 1.7 crore, according to DGCA figures. Domestic carriers suffered a 26% fall in overseas carriage, highlighted by Air India Group’s 35% plunge and IndiGo’s 15.4% reduction to 33.4 lakh passengers, a trend linked to the June 2025 Ahmedabad crash and the continued closure of Pakistani airspace.
Meanwhile, foreign airlines benefited: Emirates lifted its India-related passenger count by 7% to 14.8 lakh, Etihad’s decline was minimal, and European carriers such as Lufthansa and British Airways added capacity, with Lufthansa moving 3.7 lakh passengers and British Airways maintaining around 2.9 lakh. The conflict between the United States and Iran has thus reshaped market dynamics, penalising home-grown airlines while opening opportunities for overseas competitors.
Why it matters
The story reveals how geopolitical tensions can quickly shift airline market share, hurting domestic carriers and boosting rivals.
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