Airspace Closures and Soaring Fares Drive Indian Travellers Toward Eastern Destinations

Indian travellers are increasingly choosing Eastern destinations as airspace closures, rising airfares and currency depreciation dampen demand for Western routes, six months into the West Asia conflict. International airfares rose by double digits during the summer season and are expected to remain elevated because of ongoing geopolitical tensions and higher jet fuel prices, according to industry executives and experts.

Aloke Bajpai, Group CEO of ixigo, said international airfares rose 40% year-on-year during the summer. Over the April–June period, ixigo recorded 100% growth in bookings to Vietnam, 70% growth to Sri Lanka, 30% growth to Singapore and 20% growth to Thailand, while bookings to Japan more than doubled. Early festive-season demand has also strengthened, with Hanoi bookings more than doubling and Bali, Colombo and Bangkok each recording over 70% year-on-year growth.

On the supply side, Air India group cut its international network capacity by 27%, equivalent to 145 weekly flights, over the summer months, with North American routes down 39% and European and Asian routes down by up to 57%. IndiGo also reduced its international operations during the same period. Abbas Moiz, Board Member of the Federation of Associations in Indian Tourism and Hospitality (FAITH), said travel to Dubai fell by more than 50% in the conflict's early months before stabilising, and that travel to West Asia overall fell sharply when the conflict began but has since recovered month-on-month, supported by regional incentives. Moiz said westbound travel has declined primarily because of reduced airline seat capacity, while eastbound travel is booming, with Vietnam, Japan, the Philippines, Australia, New Zealand and Hong Kong performing strongly alongside short-haul destinations such as Sri Lanka.

This case illustrates how a geopolitical shock transmits through the travel industry not primarily through falling demand but through capacity withdrawal: carriers cut weekly frequencies on affected routes, fares on remaining seats rise, and travellers already booking discretionary leisure trips redirect toward routes where capacity held steady or grew.

In the leisure and outbound travel segment, bookings tend to follow available seats and fares more closely than they follow destination preference, which is why eastbound routes such as Vietnam, Sri Lanka and Japan absorbed demand that would otherwise have gone west, while Dubai travel only began recovering once regional incentives and, implicitly, capacity started to stabilise.

Moiz's expectation that westbound travel will recover more slowly while eastbound demand stays strong points to seat capacity, not conflict developments alone, as the variable worth tracking next — specifically whether Air India and IndiGo restore the cut international frequencies, including the 145 weekly flights removed from Air India's network, as fuel prices and route risk evolve.