Air India has announced a phased increase in fuel surcharges across its domestic and international network starting March 12, citing a sharp surge in aviation turbine fuel (ATF) prices linked to the escalating conflict in West Asia. The Tata Group-owned airline said global jet fuel prices have nearly doubled from roughly $85-
90 per barrel to between $150 and $200 after supply disruptions caused by geopolitical tensions in the region. The new charges will be introduced in three stages across routes including domestic, regional, and long-haul flights operated by Air India and Air India Express.
The airline said the surcharge is necessary to offset rising operating costs and prevent possible flight cancellations. The move comes as airlines worldwide including Qantas, Scandinavian Airlines, and Air New Zealand also raise fares or introduce surcharges amid soaring oil prices and disrupted fuel supply chains caused by the West Asia conflict.
Air India Announces Phased Fuel Surcharge Rollout
According to the airline, aviation turbine fuel one of the largest expenses for airlines globally accounts for nearly 40% of operating costs and has witnessed “significant price escalation” since early March due to supply disruptions linked to the ongoing conflict in the Gulf region.
To manage this surge, Air India has introduced a three-phase surcharge rollout. Under Phase 1, effective for new bookings from 0001 hours IST on March 12, domestic and SAARC routes will attract a surcharge of ₹399 per ticket. Flights to West Asia and the Middle East will see a $10 surcharge, while Southeast Asian routes will increase from $40 to $60. Travel to African destinations will see the surcharge rise from $60 to $90. Notably, flights to and from Singapore which previously did not carry a fuel surcharge will now include one as well.
Phase 2, effective from March 18, targets long-haul routes. Passengers travelling to Europe will see the fuel surcharge increase from $100 to $125. For flights to North America and Australia, the surcharge will rise from $150 to $200. The airline has also announced a Phase 3 covering Far East destinations such as Hong Kong, Japan and South Korea, with details to be revealed at a later stage.
Air India clarified that tickets issued before the respective phase dates will not attract the revised surcharges unless passengers make changes to their travel dates or itineraries that require fare recalculation. In its official statement, the airline said it “regrets the need to increase fuel surcharges in this manner” but emphasised that the decision is driven by external factors beyond its control. Without such adjustments, some flights might not be able to cover operating costs and could face cancellation.
Global Aviation Sector Faces Fuel Price Shock
The surcharge announcement reflects broader turbulence across the global aviation sector as geopolitical tensions disrupt fuel supply chains and push oil prices higher. Since the conflict escalated, jet fuel prices have surged dramatically, in some markets reaching levels close to four-year highs.
One major factor behind the spike is the disruption to shipping routes and energy supply flows through the Strait of Hormuz one of the world’s most crucial oil transit corridors. Supply disruptions in the region have caused aviation fuel prices to rise sharply, increasing operational costs for airlines worldwide.
Airlines across Asia, Europe and Oceania have already started passing some of these costs to passengers. Qantas recently raised international airfares citing volatile oil prices linked to the Middle East conflict, while Scandinavian Airlines and Air New Zealand have warned that higher fuel costs could impact ticket prices and profitability.
Industry experts note that airlines typically rely on fuel hedging strategies to shield themselves from sudden price spikes. However, the rapid escalation of the conflict and the sharp rise in crude oil prices have made it difficult for many carriers to fully absorb the costs. Some analysts estimate that global jet fuel prices jumped more than 50% within a week during the recent crisis, intensifying financial pressure on airlines already operating on tight margins.
For Indian carriers in particular, the impact is compounded by domestic tax structures. Air India pointed out that high excise duty and value-added tax on aviation turbine fuel in major metro cities such as Delhi and Mumbai significantly magnify the cost burden for airlines. This tax structure makes ATF in India among the most expensive in the world, further straining airline operating economics.
While Air India has become one of the first Indian airlines to introduce a surcharge in response to the crisis, other domestic carriers including IndiGo, SpiceJet and Akasa Air have not yet announced similar measures. However, industry observers suggest that prolonged geopolitical tensions and sustained fuel price increases could force more airlines to reconsider ticket pricing strategies in the coming weeks.
The Logical Indian’s Perspective
The decision by airlines to increase surcharges highlights how global conflicts can ripple through everyday life, affecting sectors far removed from the battlefield. From rising fuel prices to increased travel costs, the economic consequences of geopolitical tensions often fall most heavily on ordinary citizens and travellers.
While airlines must ensure financial sustainability in the face of volatile energy markets, transparency and fairness in pricing remain essential to maintain public trust.
Also read: India Revises FDI Rules: 60-Day Fast-Track, 10% Automatic Route for Border Country Investments
