Air India Rolls Out Phased Fuel Surcharge Amid Soaring ATF Prices, ETTravelWorld

Air India Group has announced a phased expansion of fuel surcharges across its domestic and international network following a sharp rise in aviation turbine fuel (ATF) prices driven by the evolving geopolitical situation in the Gulf region.

According to the airline group, ATF prices have risen significantly since early March 2026, placing additional pressure on airline operating costs. Aviation turbine fuel accounts for nearly 40 per cent of an airline’s total operating expenditure, making fluctuations in fuel prices a key factor influencing airline economics and fare structures.

The cost impact is further intensified in India due to the structure of fuel taxation. High Excise Duty and Value Added Tax (VAT) on ATF in major metro markets such as Delhi and Mumbai continue to increase the effective fuel cost for airlines operating in the country. This combination of global supply disruptions and domestic tax pressures has contributed to the decision to introduce a revised fuel surcharge structure.

Air India stated that the surcharge will be implemented in phases across its domestic and international routes. The adjustment will apply to all flights operated by the Air India Group, including services operated by Air India Express, and will cover all new bookings made from 0001 hours India Standard Time on 12 March 2026.

The airline noted that the phased approach is intended to manage the impact of rising fuel prices while maintaining operational stability across its network. Fuel surcharges remain a commonly used mechanism in the aviation industry to partially offset fluctuations in fuel costs and sustain route viability during periods of market volatility.

Air India added that it continues to closely monitor global fuel price trends and geopolitical developments that may affect aviation fuel supply and pricing.