Air India, Air India Express to Increase Fuel Surcharge from 12th March

Moneylife Digital Team 11 March 2026

Consumer Interest

The Air India group has announced a phased expansion of fuel surcharges on its domestic and international flights, citing a steep rise in aviation turbine fuel (ATF) prices driven by geopolitical tensions in the Gulf region. The revised surcharges will apply to all flights operated by the airline group, including those operated by Air India Express, and will take effect for new bookings made from 12 March 2026.

The airline says the move has been necessitated by a sharp escalation in jet fuel prices since early March, largely due to supply disruptions and instability in global energy markets linked to the ongoing tensions in West Asia.

"Since early March 2026, ATF, which accounts for nearly 40% of an airline’s operating costs, has seen significant price escalation due to supply interruptions. In India, this pressure is amplified by high excise duty and value-added tax (VAT) on ATF in major metro cities such as Delhi and Mumbai, magnifying the impact and placing substantial strain on airline operating economics. The new fuel surcharges are being implemented in three phases, covering travel on all flights, including those operated by Air India Express," the carrier says.

Under the first phase of the surcharge revision, passengers booking domestic flights and travel within the South Asian Association for Regional Cooperation (SAARC) region will pay an additional Rs399 as fuel surcharge. For international routes, the surcharge will be US$10 for West Asia and Middle East destinations, US$60 for Southeast Asia routes and US$90 for Africa. In the second phase, the airline will levy a surcharge of US$125 on flights to Europe and US$200 on routes to North America and Australia. The airline says a third phase covering Far East markets such as Hong Kong, Japan and South Korea will be announced later.

Air India clarified that tickets issued before the revised surcharge comes into effect will not attract the new charges unless passengers make changes to their travel dates or itineraries that require the fare to be recalculated. The airline also says it regrets the need to increase the surcharge but stressed that the decision has been driven by factors beyond its control. Without such surcharges, the airline warned that some flights may not be able to cover operating costs and could face cancellation.

The airline added that the surcharge will be reviewed periodically and adjusted depending on developments in fuel prices and global energy markets.

Indian carriers face additional cost pressure due to relatively high excise duty and state-level VAT on aviation turbine fuel in major metro cities such as Delhi and Mumbai, which amplifies the impact of global fuel price fluctuations.

Global oil prices have been highly volatile in recent weeks amid escalating tensions in the Gulf region and disruptions to energy supply routes. Benchmark Brent crude oil prices had surged sharply earlier after the closure of the Strait of Hormuz, a key maritime corridor that handles roughly one-fifth of global oil shipments. The disruption left several tankers stranded, tightened supply and pushed up energy costs worldwide.

However, crude prices eased slightly on Wednesday after reports suggested that the International Energy Agency may consider releasing emergency oil reserves to cool the price surge. Brent crude fell to around US$86.93 per barrel while West Texas Intermediate futures dropped to about US$82.82. Prices had briefly approached US$120 per barrel earlier in the week before retreating following comments by Donald Trump indicating the possibility of the conflict easing.

Air India says it will continue monitoring the situation closely and make further adjustments to surcharges if required.

Comments