Air India to raise fuel surcharge amid steep rise in jet fuel prices

Air India has announced a phased increase in fuel surcharges for domestic and international flights. The airline cites rising jet fuel prices, driven by geopolitical issues and high taxes, as the reason for the hike starting March 12.

Air India on Tuesday announced a phased expansion of fuel surcharges on both domestic and international routes and said the step has been necessitated by a steep rise in jet fuel prices arising from the geopolitical situation in the Gulf region.

Reasons for Surcharge Increase

In a statement, the airline said aviation turbine fuel (ATF), which accounts for nearly 40 per cent of an airline's operating costs, has witnessed a significant price escalation since early March 2026 due to supply interruptions. "In India, this pressure is amplified by high Excise Duty and VAT on ATF in major metro cities such as Delhi and Mumbai, magnifying cost....and placing substantial strain on airline operating economics," the statement said.

Phased Implementation Details

According to the statement, the new fuel surcharge will be implemented in three phases and will apply to travel on all flights, including those operated by Air India Express.

Phase 1: Starting March 12

The first phase will apply to all new bookings made from March 12. Under this phase, domestic routes within India and flights to SAARC countries will see a fuel surcharge of Rs 399, which was previously not applied. Flights to West Asia and the Middle East will carry a surcharge of USD 10. For Southeast Asia routes, the surcharge will rise from USD 40 to USD 60, while flights to Africa will see the surcharge rise from USD 60 to USD 90. The airline also clarified that flights to and from Singapore currently do not attract a fuel surcharge but it shall apply from Phase 1.

Phase 2: Starting March 18

Phase 2 of the surcharge expansion will take effect for bookings made from March 18. Fuel surcharges on flights to Europe will increase from USD 100 to USD 125. For routes to North America and Australia, the surcharge will increase from USD 150 to USD 200.

Phase 3: Far East Markets

A third phase, covering Far East markets including Hong Kong, Japan and South Korea, will be announced in due course, the release said.

Policy for Existing Tickets and Airline's Position

Air India said tickets already issued before the implementation times will not attract the new surcharge unless passengers request date or itinerary changes that require a recalculation of fares.

"Air India regrets the need to increase fuel surcharges in this manner but emphasises that it is necessitated by factors outside its control. Absent such fuel surcharges, it is likely that some flights would be unable to cover operating costs and would have to be cancelled," the statement said.

The airline added that it will review surcharges periodically and make appropriate adjustments as the situation requires. (ANI)

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