Air India fares set to rise from April 8 as fuel surcharge hiked amid Iran war

The Air India group on Tuesday announced a revision in its fuel surcharge structure across both domestic and international routes citing a sharp surge in global jet fuel prices The changes will come into effect from April 8 2026 including flights operated by Air India ExpressDistancebased surcharge introduced for domestic routesFor domestic travel the airline has shifted from a flat fuel surcharge to a distancebased grid system aligning with the governmentrsquos decision to cap Aviation Turbine Fuel ATF price hikes at 25 per centFuel surcharge per passenger per sectorThe move follows directives from the Ministry of Petroleum and Natural Gas and the Ministry of Civil Aviation aiming to balance rising operational costs while limiting the impact on passengersInternational routes see steeper surcharge hikeOn international routes however the absence of similar regulatory relief has led to more significant increases in fuel surchargesFuel surcharge per passenger per sector By RegionAccording to the International Air Transport Association IATA global jet fuel prices have nearly doubled rising from USD 9940 per barrel at the end of February to USD 19519 per barrel for the week ending March 27 2026Airlines are also grappling with a sharp rise in refining margins or lsquocrack spreadrsquo which has surged from USD 2783 to USD 8144 per barrel within three weeksmdashfurther intensifying cost pressuresAirline to absorb part of rising costsDespite the revision Air India stated that the updated surcharges do not fully offset the steep increase in fuel prices and the airline will continue to absorb a significant portion of the additional costsNo impact on already issued ticketsThe airline clarified that tickets issued before April 8 will not be affected unless passengers make changes to their travel dates or itineraries that require fare recalculationFurther revisions under considerationAir India also said that surcharge revisions for routes to and from Bangladesh and Far East destinations including Japan Hong Kong and South Korea will be announced separately subject to regulatory approvalsThe airline added that it will periodically review fuel surcharges and make adjustments depending on global fuel price trendsThis marks the second consecutive instance of the Air India group implementing a phased increase in fuel surcharges across its domestic and international network attributing the move to a sharp rise in aviation turbine fuel ATF prices amid geopolitical tensions in the Gulf regionEarlier from March 12 Air India had introduced a fuel surcharge of Rs 399 on domestic flights while also rolling out phased increases on international routes citing escalating ATF costs The airline had clarified that passengers holding existing tickets would not be impacted unless they opted to modify their travel plansOn March 10 the airline had highlighted that ATF which constitutes nearly 40 per cent of an airlinersquos operating expenses witnessed a significant surge due to supply disruptions In India the situation is further aggravated by steep excise duty and valueadded tax VAT on ATF in key metro cities such as Delhi and Mumbai adding pressure on airline operating margins