Air India revises fuel surcharge structure as ATF price doubles amid Iran war

Following a joint decision by the Ministry of Petroleum & Natural Gas and the Ministry of Civil Aviation, the Air India group will now apply a revised fuel surcharge for domestic and international flights to limit the increase in domestic Aviation Turbine Fuel (ATF) prices to 25%. The decision comes as the airline responds to a steep increase in global jet fuel costs. The revised charges will take effect from April 8, 2026, while some international sectors will see further changes from April 10.

The airline said the move comes amid mounting cost pressures, with jet fuel prices rising sharply in a short span. Data from the International Air Transport Association shows that the average price of jet fuel climbed to $195.19 per barrel for the week ending March 27, compared to $99.40 at the end of February, marking a near doubling in prices.

Domestic Fuel Surcharge (Per Passenger, Per Sector)

Will Air India flyers bear the brunt?

For international routes, where no similar price controls exist on ATF, the airline will introduce steeper revisions to fuel surcharges.

Recent figures released by the International Air Transport Association (IATA) show that the global average price of jet fuel climbed sharply to $195.19 per barrel for the week ending March 27, 2026, compared to $99.40 at the end of February. This marks an increase of nearly 100%.

ATF prices have risen due to both higher crude oil costs and a surge in refining margins, known as the crack spread. The crack spread jumped from $27.83 per barrel in the week ending February 27 to $81.44 per barrel by March 27, nearly tripling within a short span.

This dual impact has created one of the toughest fuel cost scenarios for airlines globally in recent years. Despite the surcharge revisions, Air India stated that these increases still do not fully offset the sharp rise in fuel expenses, and the airline continues to absorb a substantial portion of the cost.

International Fuel Surcharge (Per Passenger, Per Sector)

Fuel surcharge revisions for routes to and from Bangladesh, as well as Far East destinations such as Japan, Hong Kong, and South Korea, will be announced later, subject to regulatory approvals.

Tickets issued before the specified effective dates will not be subject to the revised surcharge. However, any changes to travel dates or itineraries may lead to a recalculation of fares.

The airline has said it will continue to monitor fuel prices and review surcharge levels periodically, making adjustments as required.