Air fares are set to rise after the Air India Group announced it will introduce a phased fuel surcharge on its domestic and international routes, citing the sharp increase in aviation turbine fuel (ATF) prices due to the ongoing geopolitical situation in the Gulf region.
ATF prices, which account for nearly 40 per cent of an airline’s operating costs, have risen significantly since early March 2026 due to supply disruptions. In India, the cost pressures are further intensified by high excise duty and VAT on ATF in major metro cities such as Delhi and Mumbai, placing additional strain on airline operating economics.
The revised fuel surcharge will be implemented in three phases and will apply across the airline’s network. Air India Express, however, currently does not levy fuel surcharges on any of its flights.
Phase 1: Effective March 12, 2026
For all new bookings made from 0001 hours IST on March 12, a fuel surcharge will be introduced on several routes. Domestic and SAARC routes will attract a surcharge of INR 399, while flights to West Asia and the Middle East will see a surcharge of USD 10. Surcharges on Southeast Asia routes will increase to USD 60, while surcharges on flights to Africa will increase to USD 90. The surcharge will also apply to flights to and from Singapore, where it was previously not levied.
Phase 2: Effective March 18, 2026
In the second phase, applicable to bookings made from 0001 hours IST on March 18, fuel surcharges will be revised for long-haul routes. Flights to Europe will incur a USD 125 surcharge, while routes to North America and Australia will incur a USD 200 surcharge.
Phase 3: Far East routes
A third phase covering routes to the Far East, including Hong Kong, Japan, and South Korea, will be announced at a later stage.
The airline clarified that tickets issued before the implementation dates will not incur the revised surcharge unless passengers change their travel dates or itineraries that require a fare recalculation.
Air India said the surcharge increase is necessary due to factors outside the airline’s control, adding that without these measures, some flights may struggle to cover operating costs and could be cancelled.
The airline said it will review surcharges periodically and adjust them based on fuel price movements and operating conditions.
