Air India has announced a phased increase in fuel surcharges across its domestic and international flights, citing a steep rise in aviation turbine fuel (ATF) prices triggered by the ongoing conflict in West Asia. The airline group said the increase is necessary to manage mounting operating costs caused by global supply disruptions.

ATF is one of the biggest expenses for airlines, accounting for nearly 40 per cent of total operating costs.

Jet fuel prices surge amid conflict

According to Air India, jet fuel prices in global markets "have seen significant price escalation due to supply interruptions" since early March as tensions escalated in West Asia. Prices have roughly doubled, climbing from around $85 to $90 a barrel to between $150 and $200.

The airline said the spike is linked to supply interruptions and broader uncertainty in energy markets.

Airlines in several regions have already taken steps to offset the rising costs. Australia’s Qantas, Scandinavia’s SAS and Air New Zealand have announced fare increases or temporary fuel surcharges. Hong Kong Airlines has also said it will raise fuel surcharges by up to 35.2 per cent.

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Air India said the financial pressure is further intensified in India due to high excise duty and value-added tax on ATF in major cities like Delhi and Mumbai, “magnifying the cost impact and placing substantial strain on airline operating economics”.

Three-phase surcharge rollout

Air India said the revised fuel surcharges will be introduced in three phases across all flights, including those operated by Air India Express.

In the first phase, which takes effect for new bookings from 0001 hours IST on March 12, passengers will see a surcharge of ₹399 on domestic and SAARC routes. Flights to West Asia and the Middle East will carry a $10 surcharge.

Southeast Asian routes will see surcharges increase from $40 to $60, while African routes will rise from $60 to $90. The airline will also introduce a fuel surcharge on flights departing from Singapore, where none currently applies.

The second phase begins on March 18. Long-haul routes will see further increases, with European flights rising from $100 to $125. Surcharges on North American and Australian routes will increase from $150 to $200.

A third phase covering Far East destinations such as Hong Kong, Japan and South Korea will be announced later.

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Impact on existing bookings

Air India said tickets issued before the effective dates of each phase will not be subject to the new surcharges unless passengers modify their itinerary or travel dates, which may require a fare recalculation.

"Air India regrets the need to increase fuel surcharges in this manner but emphasises that it is necessitated by factors outside its control. Absent such fuel surcharges, it is likely that some flights would be unable to cover operating costs and would have to be cancelled", the airline said in a statement.

Air India Express currently does not levy fuel surcharges on its flights. The group said it will review the surcharge levels periodically, depending on fuel price trends.