SpiceJet chairman says crude oil even at $90 is ‘unsustainable’

Local operators, including IndiGo, Air India and SpiceJet, are among the hardest hit outside the Middle East as the Iran war enters its second week

Indian airlines may need to rethink expansion plans as crude oil prices hover at unsustainable levels, even at $90 a barrel, budget carrier SpiceJet Ltd.’s chairman warned.

“We don’t know where things are really going,” Ajay Singh, who’s also the managing director at SpiceJet, said in an interview with Bloomberg Television’s Haslinda Amin on Tuesday. Fares in domestic routes are unlikely to stay steady as Indian airlines “will have no choice but to impose a fuel surcharge.”

Indian carriers have hiked prices on long-haul routes by 15%, Bloomberg News reported Monday. Airlines will have to pass on some of the higher costs given how price sensitive the Indian market is, Singh added, signaling that local fares may climb up as well.

Local operators, including IndiGo, Air India and SpiceJet, are among the hardest hit outside the Middle East as the Iran war enters its second week. Their heavy reliance on Gulf routes and surging fuel costs are compounded by restrictions on Pakistan airspace, imposed since mid-2025 following a border conflict.

Airlines in the region aren’t as well hedged against high oil prices as rivals in Europe or the US, making them more vulnerable to sudden surges in jet fuel prices. After surging toward $120 a barrel on Monday, crude oil has tumbled after US President Donald Trump said the war will resolve “very soon” but didn’t say when.

Growth plans for airlines will certainly be impacted in the region if the crisis in the Middle East continues, according to Singh. While SpiceJet’s entire international schedule for March is exposed to the Middle East, Air India Express has 60% exposure and IndiGo 41%, Bloomberg Intelligence said in a note last week.

Carriers will also have to consider whether they want to keep flying their entire fleet, he added. “Does it make sense to keep flying planes when it loses you money? That will have to be calculated.”

The Gulf region “disruption is especially painful for Indian carriers as international routes provide a natural currency hedge against rupee depreciation — critical now with crude prices rising due to the war,” Bloomberg Intelligence Analysts Eric Zhu and George Ferguson wrote in a March 2 note.

Singh, however, does not expect any domestic shortage of jet fuel as long as crude oil cargoes are available since Indian refiners produce own Aviation Turbine Fuel.