Air India Increases Fuel Surcharge, Flight Fares Likely To Rise Amid Israel-Iran War

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Air India on Tuesday announced a phased expansion of fuel surcharges on both domestic and international routes and said the step has been necessitated by a steep rise in jet fuel prices arising from the geopolitical situation in the Gulf region.

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In a statement, the airline said aviation turbine fuel (ATF), which accounts for nearly 40 per cent of an airline’s operating costs, has witnessed a significant price escalation since early March 2026 due to supply interruptions.

“In India, this pressure is amplified by high Excise Duty and VAT on ATF in major metro cities such as Delhi and Mumbai, magnifying cost… and placing substantial strain on airline operating economics,” the statement said.

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According to the statement, the new fuel surcharge will be implemented in three phases and will apply to travel on all flights, including those operated by Air India Express.

The first phase will apply to all new bookings made from March 12. Under this phase, domestic routes within India and flights to SAARC countries will see a fuel surcharge of Rs399 ($4.34), which was previously not applied. Flights to West Asia and the Middle East will carry a surcharge of $10. For Southeast Asia routes, the surcharge will rise from $40 to $60, while flights to Africa will see the surcharge rise from $60 to $90.

The airline also clarified that flights to and from Singapore currently do not attract a fuel surcharge but it shall apply from Phase 1.

Phase 2 of the surcharge expansion will take effect for bookings made from March 18. Fuel surcharges on flights to Europe will increase from $100 to $125. For routes to North America and Australia, the surcharge will increase from $150 to $200.

A third phase, covering Far East markets including Hong Kong, Japan and South Korea, will be announced in due course, the release said.

Air India said tickets already issued before the implementation times will not attract the new surcharge unless passengers request date or itinerary changes that require a recalculation of fares.

“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 statement said.

The airline added that it will review surcharges periodically and make appropriate adjustments as the situation requires.

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