Indian airlines may roll back the imposition of fuel surcharge as the government has not passed on the full burden of the price hike in aviation turbine fuel (ATF) to domestic carriers.
Indian aviation companies are considering the move, which will give relief to passengers, according to NDTV Profit.
Due to the rising cost of fuel, companies had started levying a surcharge in March. But since the government has given a significant relief of 75 percent to Indian airlines in ATF prices, the companies are considering backtracking on the surcharge imposition.
Air India and Air India Express had added a Rs 399 surcharge on domestic tickets. For international routes, these levies range from approximately Rs 830 for West Asia to as high as Rs 16,600 for long-haul destinations.
Fuel surcharge levied by IndiGo ranges from Rs 425 to Rs 2,300, depending on the distance, which includes a Rs 425 levy on domestic routes.
Akasa Air has also introduced a surcharge between Rs 199 and Rs 1,300 based on flight duration.
On Wednesday, ATF prices were revised upwards by over 100 percent due to supply disruption that caused a shortage of fuel.
For example, ATF rates in Delhi have been raised by Rs 110,703.08 per kilolitre, or 114.5 percent, to Rs 207,341.22 per kilolitre.
But the government has shielded Indian airlines from the steep rise, passing on just a quarter of the total increase. Domestic airline companies like IndiGo and Air India will have to bear only Rs 15,000 per kilolitre of the burden.
“In order to insulate domestic travel costs from the substantial increase in international prices, PSU Oil Marketing Companies of the Ministry of Petroleum, in consultation with the Ministry of Civil Aviation, have passed only a partial and staggered increase of 25% (only Rs 15/litre) to the airlines. Foreign routes will pay for the full increase in ATF prices, consistent with what they pay in other parts of the world,” the oil ministry said in a post on X (formerly Twitter).
The decision is significant as fuel accounts for nearly 35–40 percent of an airline’s operating costs.
