Oh, dear, this does come as such a shock when it first happens. When my FIL first started asking where his wife was (she'd been dead 10 years) at first we gently explained the truth. But he was so terribly upset, and so because his short term memory was so bad by then, I.e. he'd forget whatever we said in 5 minutes anyway, we started saying, oh, she's just popped to the shops, or, she's just gone to see so and so, -and he'd be quite happy. Would something similar pacify your dad, if his short term memory is also very bad?
So hard when he's asking over the phone and can't hear, though. Could you leave a note somewhere like on his fridge to say she's on a little holiday or whatever sounds best, and hope he sees it?