Air India Adjusts Fuel Surcharge Structure Amid Rising Jet Fuel Prices
Revised Fuel Surcharge Announcement
Following IndiGo's lead, Air India has revealed changes to its fuel surcharge framework for both domestic and international flights. These adjustments will take effect on April 8 for domestic routes and on April 10 for destinations in Europe, North America, and Australia. The airline noted that the current fuel surcharges on international routes do not adequately cover the significant rise in jet fuel costs. Air India is absorbing a considerable portion of these increased expenses, as stated in their announcement.
In light of the Ministry of Petroleum & Natural Gas and the Ministry of Civil Aviation's decision to limit domestic Aviation Turbine Fuel (ATF) price hikes to 25%, Air India is adopting a more measured approach. This includes shifting from a flat surcharge to a distance-based pricing model. Recent data from the International Air Transport Association (IATA) indicates that the global average price of jet fuel surged to USD 195.19 per barrel for the week ending March 27, 2026, a significant increase from USD 99.40 at the end of February, marking an almost 100% rise.
ATF, derived from crude oil, has experienced simultaneous price increases in both its crude oil base and the refinery margin, known as the 'crack spread,' which has nearly tripled in just three weeks. This margin rose from USD 27.83 per barrel at the end of February to USD 81.44 by the end of March. Such drastic increases contribute to one of the toughest fuel cost scenarios that airlines worldwide have encountered in recent years.
Air India's revised fuel surcharge per passenger, per sector is now based on distance bands. For flights covering distances of 0–500 km, the surcharge is set at Rs 299. Passengers traveling within the 501–1000 km range will incur a charge of Rs 399, while those flying between 1001–1500 km will pay Rs 549. For longer journeys, the surcharge escalates further: flights covering 1501–2000 km will attract a fee of Rs 749, and for distances exceeding 2000 km, passengers will be charged Rs 899. These new surcharge rates will be implemented starting at 0901 hours IST on April 8, 2026.