Oil on fire, AI Group to levy or hike fuel surcharge from Thursday

New Delhi: With oil prices on fire, flying will now cost more. Air India group will from March 12 levy a new fuel surcharge (FS) of Rs 399 on domestic flights and SAARC flights. Its West Asia flights will now have a FS of $10. And the existing FS on international flights to other destinations will rise by up to $50 and be in the range of $60-200. AI Express so far did not have a separate fuel surcharge but will do so now.

Other Indian airlines are going to follow suit as doing so simultaneously attracts the charge of cartelisation. Foreign airlines have also hiked fares, which are anyway at skyhigh levels for international routes post the Iran-Israel war.




The surcharge will be levied in three phases by AI and AI Express:

1. On all new booking starting 12.01 am on March 12: Rs 399 for domestic and SAARC flights (currently nil).$10 for West Asia flights (currently nil).

For southeast Asia flights, it will rise from $40 to $60.

And for Africa, from $60 it will rise to $90.

2. On all new bookings from 12.01 am on March 18:Fuel surcharge will rise from $100 to $125 on Europe flights. Rise from $150 to $200 on North America and Australia flights.

3. Date and amount of fuel surcharge for Hong Kong, Japan and South Korea to be announced later.

AI Group tickets that have already been issued before the dates will not attract the new surcharge unless customers seek date or itinerary changes that require a recalculation of the fare.

"Since early March 2026, aviation turbine fuel (ATF), which accounts for nearly 40% of an airline's operating cost, has seen a significant price escalation due to supply interruptions. In India, this pressure is amplified by high excise and VAT on ATF in major metro cities like Delhi and Mumbai,.. placing substantial strain on airline operating economics," said AI in a statement.

While "regretting" the same, it said "some flights would be unable to cover operating costs and would have to be cancelled" had the surcharge not been applied.

Airlines in India have for years been seeking some fiscal relief on excise and GST on fuel to no avail. But with oil prices skyrocketing, rupees crashing to new lows everyday, longer routes due to airspace restrictions and uncertainty of schedules, costs have reached a tipping point for airlines. Indian airlines with significant international bookings and sales in forex were a little insulated on rupees front so far but the hike in oil prices and long routes - with no fiscal support from govt on excise or GST - passengers will have to shell out even more to fly.