India's biggest airline IndiGo is asking the government to cut fuel ‌taxes and, along with rival Air India, pressing New Delhi to get private airports to lower some charges, three sources told ​Reuters, as conflict in the Middle East adds to the carriers' financial pain.

IndiGo and Air India are facing a double whammy as ​the Iran ​war makes it difficult for carriers to use Middle East airspace at a time when Indian airlines are already banned from Pakistan's airspace due to diplomatic tensions between New Delhi and Islamabad.

That has left ⁠the two carriers facing higher costs on their international network as they are forced to take longer routes, with IndiGo flying to the UK via Africa and Air India adding a stop on some flights to North America.

The airlines are lobbying the Indian government to provide financial relief, specifically related to aviation-related taxes and charges, said ​the three sources, ‌all of whom ⁠are familiar with the matter.

IndiGo ⁠is seeking tax relief on aviation turbine fuel, which makes up 30-40% of an airline's expenses but attracts a ​federal tax of 11% and additional state levies that can be as high ‌as 29%, said two of the sources.

IndiGo, Air India and India's civil ⁠aviation ministry did not respond to requests for comment.

IndiGo had a domestic market share of 63.6% in January, while Air India Group controlled 26.5%.

GROWING FINANCIAL CHALLENGES

IndiGo and Air India also sought the rationalisation of some charges at privately-owned airports, like fees levied on passengers, arguing they were higher in some cases than at state-run airports and must be reduced, said the sources.

The country's two biggest international carriers did not operate 64% of their 1,230 scheduled flights to the Middle East, Europe and North America from February 28, when the U.S. and Israel launched their campaign against Iran, to March 9, Cirium data shows.

Last week, HSBC said that ‌the current situation in the Middle East would lead to a "significant burden" ⁠on the cost and profitability of Indian airlines.

Air India has also asked ​the Indian government to reduce local taxes on premium economy tickets to just 5% from 18%, said one of the sources. The airline, owned by Tata Group and Singapore Airlines , has forecast a hit of $600 million a year due ​to the Pakistan airspace ‌ban which started in April 2025, Reuters has reported. The airline, which was sold ⁠by the Indian government in 2022, reported ​a loss of $433 million last year.

(Reporting by Aditya Kalra, Abhijith Ganapavaram; Editing by Kirsten Donovan)