IndiGo announces revised fuel surcharge after ATF price hike

E-PaperSubscribeSubscribeEnjoy unlimited accessSubscribe Now! Get features like Jet fuel prices were hiked by 8.56% on Wednesday, with IndiGo, India’s largest carrier, becoming the first to pass on the increase by announcing new fuel surcharges of up to ₹950 per sector on domestic routes and ₹10,000 on long-haul international flights for all new bookings from April 2. Representational image. (Vipin Kumar/ Hindustan Times/ Representational)The overall ATF (aviation turbine fuel) hike, however, was moderated — the government said it had coordinated with oil companies to pass on only a partial and staggered surge of international oil prices to domestic airlines, averting a far steeper increase. ATF prices, which account for around 40% of an airline’s operating costs, in Delhi were increased by ₹8,289 per kilolitre to ₹1,04,927 per KL from ₹96,638 per KL last month. IndiGo’s revised surcharge schedule starts at ₹275 for distances up to 500 km, reaches ₹600 per sector on routes of 1,000-1,500 km such as the busy Mumbai-Delhi corridor, and touches ₹950 for routes above 2,000 km. Previously, the airline had a flat ₹425 fuel charge on all domestic flights and up to ₹2,300 on international routes. The partial hike comes as international jet fuel prices in the region have risen sharply. According to IATA’s Jet Fuel Monitor, fuel prices have risen over 130% month-on-month. The ministries of petroleum and civil aviation decided to pass on only a staggered increase to domestic airlines, while international operations will bear the full market-linked price. “At market-linked fuel prices, a large number of international flights may not cover variable costs, and airlines may have to reconsider capacity deployment on certain routes. A moderated ATF pricing mechanism for international operations by Indian carriers could help stabilise capacity and prevent sharp fare volatility,” an industry official said, asking not to be named. Civil aviation minister K Ram Mohan Naidu said the calibrated increase would help shield passengers from steep fare hikes while easing the cost burden on airlines, supporting the continued stability of the aviation sector and ensuring smooth movement of cargo and air connectivity for trade and logistics. In a post on X, Naidu said ATF — deregulated since 2001 and revised monthly against international benchmarks — had been expected to rise over 100% from April 1 due to the closure of the Strait of Hormuz. PSU oil marketing companies, in consultation with the civil aviation ministry, had implemented “only a partial and staggered increase of 25% ( ₹15/litre) for domestic airlines.” IndiGo said for international routes, surcharges will range from ₹900 to ₹10,000 per sector depending on distance and region. “Although fully offsetting the fuel price increase would require substantial fare revisions, IndiGo has passed on a relatively smaller amount to customers keeping in mind the consequential burden on them,” the airline said in a statement. Ajay Singh, chairman and managing director of SpiceJet, said the government’s decision to moderate the ATF price increase would help airlines navigate one of the most challenging global crises in recent times and materially insulate domestic air travel from a steep rise in fuel costs. “The moderate hike is unlikely to give any relief to Tata Group-owned Air India with its international operations forming a significant part in its overall operations,” a former airline official said, asking not to be named. Airlines are already grappling with higher costs from the West Asia conflict, which has forced longer flight paths due to airspace restrictions, increasing fuel burn on several international routes. Domestic aviation remains capacity-surplus, with around 3,300 daily domestic departures compared to roughly 175-200 international departures currently by Indian carriers, making ATF price moderation more critical for the domestic market. “International supply has dropped off considerably and but despite the increase in costs, demand has not taken a hit so far — this is currently a supply issue and not a demand issue. As fuel costs cool and the geopolitical situation improves, supply will increase and international fares will gradually soften,” an industry expert said, requesting anonymity. Even on the domestic side, fare relief may not last. “The fares are expected to stay elevated even if ATF cools down for Q1 of FY27, but for this to stick through Q2 will be tough given the seasonality impact. This is a classic airline cycle — when costs go up, fares go up immediately; when costs come down, fares come down slowly. Even if ATF drops back, fares may correct only around 5-10%, not fully revert,” another industry insider said. Neha LM Tripathi is a Special Correspondent with the National Political Bureau of Hindustan Times. She covers the aviation and railways ministries, and also writes on travel trends. Her work spans national developments, with a focus on policy, people, and the evolving travel landscape. She has 13 years of experience. Before moving to Delhi, she was based in Mumbai, where she began her journey as a journalist. Outside the newsroom, Neha enjoys trekking and travelling.Read More