Global Oil Shock: Air India Hikes Fuel Surcharge on Domestic, International Routes

NEW DELHI:
Air India on Tuesday announced a revision in fuel surcharge across domestic and international routes amid a rise in global jet fuel prices.

For domestic routes, the airline said it will shift from a flat surcharge to a distance-based structure, effective from Wednesday.

The revised surcharge will range from Rs 299 for flights up to 500 kms to Rs 899 for sectors above 2,000 kms.

The move follows the government’s decision to cap the increase in domestic Aviation Turbine Fuel (ATF) prices at 25 per cent, which allows airlines to adopt a calibrated approach in passing on costs to passengers.

However, the airline will implement steeper revisions due to the absence of similar price controls on ATF for international routes.

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

The airline said the sharp rise was driven by increases in both crude oil prices and refining margins, with the ‘crack spread’ jumping significantly in recent weeks, leading to one of the most challenging fuel cost environments for airlines in recent years.

After the revised structure, fuel surcharge on international routes will vary by region, starting from $24 for SAARC destinations (excluding Bangladesh) and going up to $280 for North America and Australia. Europe-bound flights will attract a surcharge of $205.

The airline said that even after the revision, surcharges do not fully compensate for the steep rise in fuel costs, and it continues to absorb a significant portion of the increase.

Tickets issued before the revised timings will not attract the new surcharge unless passengers make changes to their travel plans requiring fare recalculation.

Earlier, IndiGo increased fuel charges on flight operations due to the surge in aviation turbine fuel (ATF) prices.