Air India raises fuel surcharge as global jet fuel prices surge

Air India has announced an increase in fuel surcharges across its domestic and international network, responding to a sharp rise in global jet fuel prices that has significantly raised operating costs.

The revised charges will come into effect from Wednesday, with the airline introducing a distance-based fuel surcharge structure for domestic routes. Under the new system, passengers will pay between Rs 299 for flights up to 500 kilometres and Rs 899 for sectors exceeding 2,000 kilometres, replacing the earlier flat-rate mechanism.

The move follows a recent government decision to cap increases in domestic Aviation Turbine Fuel (ATF) prices at 25 per cent, enabling airlines to pass on costs in a more measured manner. However, no such controls apply to international fuel pricing, prompting steeper revisions on overseas routes.

Air India said fuel surcharges for international travel will now vary by destination, starting at $24 for short-haul routes within the SAARC region (excluding Bangladesh) and rising to as much as $280 for long-haul flights to North America and Australia. Flights to Europe will attract a surcharge of $205.

The airline cited data from the International Air Transport Association (IATA), noting that global jet fuel prices surged to $195.19 per barrel in the week ending 27 March, nearly doubling from $99.40 at the end of February. The increase has been driven by a combination of higher crude oil prices and widening refining margins.

Air India highlighted that the so-called “crack spread” — the difference between crude oil and refined fuel prices — has expanded sharply in recent weeks, creating one of the most challenging cost environments for airlines in recent years.

Despite the surcharge revision, the airline indicated that it is still absorbing a portion of the increased fuel costs, suggesting further pressure on margins.

Passengers who have already booked tickets prior to the implementation date will not be affected unless they modify their travel plans, in which case the revised charges may apply.

The development comes shortly after IndiGo also raised fuel surcharges, reflecting a broader industry trend as carriers grapple with rising fuel expenses amid a global oil price surge.

With IANS inputs