Air India Raises Flight Fares With Fuel Surcharge Amid Iran War Fuel Spike

Air travel in India is expected to become more expensive as Air India announced a phased fuel surcharge on several domestic and international flights. The decision comes after a sharp increase in aviation turbine fuel (ATF) prices, triggered by supply disruptions in the Gulf region linked to the ongoing Iran conflict.

The airline confirmed that the surcharge will apply to multiple routes operated by Air India as well as services run by Air India Express, though the latter previously did not impose fuel surcharges.

Rising Fuel Costs Behind Fare Increase

Air India said the move was necessary due to the rapid increase in jet fuel prices since early March 2026.

Aviation turbine fuel is one of the biggest expenses for airlines and typically accounts for around 40% of total operating costs. When fuel prices rise sharply, airlines often adjust ticket prices or introduce surcharges to offset operational expenses.

The current increase in fuel costs has been largely attributed to supply disruptions and geopolitical tensions in the Gulf region, which have impacted global energy markets.

Phased Fuel Surcharge Plan

Air India said the new fuel surcharge will be implemented in multiple phases across different routes.

Phase 1:
Domestic flights and routes to SAARC countries including Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka will see fares increase by Rs 399 per ticket.

Phase 2:
Fuel surcharges will be applied to several international routes, including:

• West Asia: around $10 increase

• South East Asia: around $20 increase

• Africa: around $30 increase

Phase 3:
Additional surcharges will later be introduced for Far East destinations such as Hong Kong, Japan and South Korea. Details of this phase will be announced later.

Existing Tickets Not Affected

The airline clarified that passengers who have already booked tickets before the surcharge implementation will not face additional charges.

However, if travellers modify their bookings or change travel dates, the ticket fare may be recalculated and the new surcharge could apply.

Impact on Airlines in India

Airlines in India are particularly sensitive to fuel price increases because ATF attracts high taxes, including excise duty and value-added tax (VAT), especially in major metropolitan cities like Delhi and Mumbai.

These taxes significantly increase operating costs for carriers compared to many international markets.

Airline Monitoring Fuel Situation

Air India said the surcharge will be reviewed periodically, and adjustments may be made depending on how global fuel prices and geopolitical conditions evolve.

The airline also noted that such surcharges are necessary to maintain flight operations.

Without them, the company indicated that some routes could become financially unsustainable, potentially leading to flight cancellations.

As global energy markets remain volatile due to geopolitical tensions, airlines worldwide are closely monitoring fuel costs and adjusting pricing strategies accordingly.