Air India Adjusts Fuel Surcharges Amid Rising Global Jet Fuel Costs

Air India Announces New Fuel Surcharge Structure

New Delhi: On Tuesday, Air India revealed a new fuel surcharge policy for both domestic and international flights, responding to the recent spike in global jet fuel prices.

The airline will transition from a uniform surcharge to a distance-based model for domestic flights, starting Wednesday.

Under this new structure, surcharges will range from Rs 299 for journeys up to 500 kilometers to Rs 899 for routes exceeding 2,000 kilometers.

This adjustment follows the government's decision to limit domestic Aviation Turbine Fuel (ATF) price hikes to 25%, enabling airlines to manage cost transfers to passengers more effectively.

In contrast, international routes will see more significant increases due to the lack of similar price regulations on ATF.

According to the International Air Transport Association (IATA), global jet fuel prices soared to $195.19 per barrel for the week ending March 27, nearly doubling from $99.40 at the end of February.

Air India attributed this sharp increase to rising crude oil prices and refining margins, with the 'crack spread' experiencing a notable surge, creating one of the toughest fuel cost situations for airlines in recent years.

Post-revision, international route surcharges will differ by region, starting at $24 for SAARC countries (excluding Bangladesh) and reaching up to $280 for destinations in North America and Australia. Flights to Europe will incur a surcharge of $205.

Despite these adjustments, the airline noted that the new surcharges do not fully cover the substantial rise in fuel costs, and it continues to absorb a considerable portion of the increase.

Tickets purchased before the new surcharge implementation will not incur the updated fees unless passengers alter their travel plans, necessitating a fare recalculation.

Previously, IndiGo also raised fuel charges in response to the climbing ATF prices.