Gulf War: Airfares Soar

From Europe To Southeast Asia: Airspace Disruptions Are Changing Where India Flies

By Zinal Dedhia

What?

Air travel out of India has entered a phase of volatility, as airlines navigate a rapidly evolving situation in West Asia. With key air corridors disrupted, carriers are being forced to reroute flights, stretching journey times and tightening available capacity.

The immediate fallout has been a sharp spike in international fares — particularly on Europe-bound routes — and a visible shift in travel demand toward Southeast Asia and alternative domestic destinations.

“The closure of Middle Eastern airspace has affected Indian aviation significantly, coming as it does on top of the existing shutdown of Pakistani airspace,” Sanjay Lazar, aviation expert, told The Core. 

“The Middle East corridor is India’s largest westbound route, and this will heavily impact IndiGo and Air India until hostilities cease and airspace over Iran reopens.”

Why? 

The disruption was most evident in early March, when fares on European routes rose by more than 40% week-on-week for bookings made between March 1 and March 5, for travel in the following two weeks. 

The surge was concentrated in mid-March departures, pointing to a short-term mismatch between demand and available seats as flights were rescheduled and rerouted.

Airlines are being forced to cancel or cut certain routes — especially those that are less profitable or operationally difficult — because longer flying times are stretching aircraft, crew and costs. Indian carriers cancelled 350+ flights immediately after airspace closures. Air India has cancelled 2,500 flights in three weeks and cut Middle East capacity significantly

A comparison of fares shared by online travel platform Cleartrip between February 28 — before the conflict escalated — and March 19 highlights just how sharply prices have moved.

On international routes, the increase is stark.

• Delhi–London fares have jumped from Rs 35,000–Rs 45,000 to Rs 85,000–Rs 1.2 lakh

• Mumbai–New York tickets have surged from Rs 55,000–Rs 70,000 to as high as Rs 1.3–Rs 2.25 lakh

• Bengaluru–Frankfurt fares have climbed from Rs 40,000–Rs 50,000 to Rs 1.5–Rs 1.9 lakh

How Does It Affect The Consumer? 

As rerouting stretches flight times, airlines are also passing on rising operational costs to passengers through fuel surcharges.

IndiGo has introduced a surcharge ranging from Rs 425 to Rs 2,300 across routes, while Air India has added Rs 399 on domestic tickets. Air India Express and Akasa Air have followed with similar measures.

International passengers are now paying additional charges ranging from $10 to $200, depending on the route.

“These diversions have already added around 20% to operating costs, with landing and crew expenses adding another 10%,” Lazar said. “If the conflict prolongs and Brent crude crosses $100–120 a barrel, aviation fuel prices will spike further, pushing ticket prices even higher.”

As Global Payments Shift To Stablecoins, Mastercard Gets Ready For What’s Next

By Vishwas Ved

What?

Companies have been gradually warming up to new technologies that are beginning to alter how money is transferred between people and across countries.

Last week, Mastercard announced it would acquire stablecoin-infrastructure company BVNK for up to $1.8 billion.

Stablecoins, available only in digital format, are linked to real currencies like the US dollar, and like Bitcoin, they run on blockchain networks. But like a currency, they are designed to hold a stable value.

The UK-based BVNK, which has built expertise and infrastructure to bridge fiat currencies and stablecoins, enables businesses across 130+ countries to send and receive funds using major blockchain networks.

Mastercard, an existing leader in payments, has acknowledged that the BVNK deal expands its “end-to-end support of digital assets and value movement across currencies, rails and regions”.

Why 

Stablecoins introduce a different way to make payments. These payments take place on blockchain networks, where transactions are initiated and settled on the same system. 

In the traditional system, a transaction is considered complete only when the money reaches the destination account. 

But when blockchain is involved, the ownership of the money, so to speak, changes on a shared ledger and the update itself completes the transaction. It works that fast even when it is a cross-border payment. 

By acquiring BVNK, Mastercard is extending its network so it can support both types of payments — card-based as well as on-chain.

The process does not depend on multiple systems handing off the transaction from one to another.

For now, Mastercard is investing in the capability so that if the financial world starts moving in that direction, it already has a way to join them.

This series is brought to you in partnership with Algorand India.

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56.5

That’s March 2026’s HSBC Flash India Composite Purchasing Managers’ Index (PMI), which tracks activity across manufacturing and services. It fell from February’s 58.9 to a three-year low, signalling a sharp slowdown in private sector growth.

Setup: Manufacturing PMI dropped sharply to 53.8 from 56.9, a 4.5-year low, as factory output and new orders weakened amid rising uncertainty. The services sector, which drives most of India’s GDP, also slowed, with its PMI easing to 57.2 from 58.1, reflecting softer demand.

Outcome: Rising costs made things worse. Firms faced higher prices for fuel, metals, food and transport, as global commodity prices climbed, pushing input cost inflation to its fastest pace since mid-2022.

As HSBC chief economist Pranjul Bhandari noted, “cost pressures intensified,” with firms both passing on higher prices to customers and absorbing part of the shock through tighter margins.

With demand weakening and inflation rising at the same time, businesses are losing momentum, pointing to a more fragile growth outlook for India’s private sector.

Iran War Chokes LPG Imports

The West Asia crisis is likely to halve India's liquefied petroleum gas (LPG) imports in March, Reuters reported. In response, India is scrambling to diversify supply, securing cargoes from the US and Russia, while domestic refineries have ramped up LPG output by 40%.

Flashpoint: Amidst this volatility, Reliance Industries has executed India's first purchase of Iranian crude since 2019, snapping up 5 million barrels following a temporary 30-day US sanctions waiver, Reuters reported. Concurrently, BPCL is launching a dedicated trading unit in Singapore this April to navigate these tightening global markets.

However, the crisis is already bleeding into the broader economy; global brewers warn of imminent price hikes as gas shortages drive up the cost of glass bottles by 20% and double paper carton rates. Meanwhile, the government said it has raised commercial LPG allocations to states to 50%, prioritising migrant labourers and essential community kitchens amid supply crunches.

Setting: Despite President Trump’s claims of "productive" talks, Iran has reportedly toughened its negotiating stance and escalated tensions on Tuesday by launching missile waves at Israel and dismissing negotiation rumours as "fake."

HDFC Shares Rise Amid Audit

HDFC Bank shares surged 1.3% Tuesday, recovering $16.27 billion in market value after appointing Trilegal, Wadia Ghandy, and an undisclosed US firm to investigate former chairman Atanu Chakraborty’s resignation, Reuters reported, citing sources. The legal trio will audit past board minutes to address Chakraborty’s citations of values and ethics conflicts, a move aimed at restoring investor confidence after a sharp 12% stock slide.

Overview: The bank intends to “reinforce robust governance standards" through this independent review, despite the RBI’s recent confirmation of the lender’s financial soundness. SEBI Chief Tuhin Kanta Pandey emphasised that independent directors must provide evidence for any insinuations, noting their duty toward minority shareholders.

Setup: To ensure leadership stability, the RBI has approved veteran Keki Mistry as interim chairman for three months.

India Tightens Misuse

The Drug Controller of India has stepped up surveillance on weight-loss drugs as cheap versions of semaglutide enter the market. It inspected 49 entities across the supply chain, including pharmacies, distributors and slimming clinics and issued notices for unauthorised sales, dispensing without valid prescriptions, and inappropriate prescribing practices.

Break: Since Novo Nordisk’s patent on semaglutide expired last week, Indian pharma companies launched lower-cost alternatives, sharply expanding access. 

Future: But the regulator warns that these drugs can cause serious adverse effects if used without medical supervision. It has also flagged their on-demand availability across online and offline channels, and cautioned companies against indirect advertising and promotional campaigns targeting consumers.

Dirty Air Is Dragging India Down

Three of the four most polluted cities in the world are in India, according to the 2025 World Air Quality Report released by IQAir, a Swiss air quality technology company. These are Byrnihat, Delhi and Loni, highlighting how deeply air pollution remains concentrated in north and northeast India.

Context: The report analysed data from over 9,400 cities across 143 countries and found that global air pollution levels remained dangerously high in 2025, with many regions far exceeding the World Health Organization’s safety limits for fine particulate matter (PM2.5). South Asia continued to record the worst air quality globally.

Impact: Beyond rankings, the report makes a clear economic case. It links poor air quality directly to declining health, lower productivity and long-term economic costs.

“The productivity of a whole future generation will be linked” to air quality, said Frank Hammes, IQAir’s global chief executive officer. He added that air pollution “reduces IQ” and limits people’s ability to work, while pushing more individuals out of the labour force due to illness.

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The Markets Recover on Tuesday

On Episode 830 of The Core Report, financial journalist Govindraj Ethiraj talks to Capt. Shiv Samrat Kapur, Managing Director of the India arm at Sentosa Ship Brokers as well as Vivek Kaul, Author and Columnist.

• The markets recover on Tuesday but on tenterhooks once again

• Net FDI has contracted for the fifth month in a row

• LPG imports into India have dropped sharply. But how are ships presently navigating the Strait and what are the logistics involved?

• Gen Z has got a reality check in the markets. Can it survive the shocks?