Air India has announced a phased fuel surcharge on domestic and international routes, citing a sharp rise in aviation turbine fuel (ATF) prices since early March 2026. The surcharge will also apply to services operated by Air India Express.
Why ATF Prices Are Rising
Aviation turbine fuel prices in India are linked to global crude oil benchmarks. With U.S. and Israeli airstrikes targeting Iran's oil infrastructure, Brent crude briefly surged to its highest level since 2022 before retreating. However, ATF prices in India have risen by an estimated 12–18% over the past two weeks as downstream supply chains digest the shock.
Impact on Air Fares
Analysts at CRISIL estimate domestic airfares could rise by 8–12% if the surcharge is fully passed on to passengers. International routes to the Middle East, Europe, and the US are expected to see larger surcharges given longer fuel burn.
Airline Sector Under Pressure
IndiGo, India's largest airline by market share, is expected to announce a similar surcharge within the coming days, industry sources said. SpiceJet and Akasa Air have also signalled they are reviewing fare structures.
Airline stocks fell sharply on Indian exchanges, with IndiGo (InterGlobe Aviation) dropping over 5% on Tuesday. Aviation sector analysts warn that sustained high ATF prices could push carriers with thin margins back into losses after two consecutive profitable years.
What Travellers Should Do
- Book flights early to lock in current base fares before surcharges escalate further.
- Check your travel insurance policy — some policies cover surcharge-related fare increases.
- Consider flexible fare options if travel plans may change, given ongoing geopolitical uncertainty.
