Air India has raised fuel surcharges for both domestic and international flights due to a significant surge in global jet fuel prices. This increase in costs comes amid the ongoing West Asia conflict, leading to an energy crisis and a spike in oil prices. The airline’s CEO and Managing Director, Campbell Wilson, recently resigned from his position.
The adjustment in fuel surcharges includes a new distance-based structure for domestic flights, replacing the previous flat rate. Passengers will now pay varying additional amounts based on the distance traveled. For instance, short-haul flights up to 500 km will incur an extra charge of Rs 299, while longer flights over 2,000 km will have a surcharge of Rs 899, the highest among domestic categories.
The surcharges are applied on a “per passenger, per sector” basis, meaning each leg of a journey is considered a separate sector. Connecting flights with multiple sectors may result in higher total surcharges compared to direct flights, despite similar overall distances. This new structure allows airlines to align pricing more closely with distance and fuel consumption, leading to potential variations in ticket costs based on routes and itineraries.
On international routes, Air India has implemented higher fuel surcharges, particularly impacting long-haul flights. The revised charges differ by region, reflecting the increased global jet fuel prices. For example, flights to nearby regions like SAARC will now have a surcharge of USD 24 per passenger per sector, while routes to Europe and North America will incur a surcharge of USD 205 and USD 280, respectively.
Global jet fuel prices have nearly doubled in recent weeks, reaching USD 195.19 per barrel by late March. This surge in fuel costs poses a significant challenge for airlines, with refining margins also experiencing a sharp increase. Despite the surcharge hike, Air India noted that the revised charges do not fully offset the rise in fuel costs, indicating that airlines are absorbing a portion of the increase while passing some costs to passengers.
The aviation sector faces mounting pressure as fuel expenses are a substantial cost component for airlines. With ongoing global tensions elevating oil prices, airlines are likely to continue facing cost pressures. Air India plans to review surcharges regularly, suggesting that fares could be adjusted further based on fuel price fluctuations.