Air India flight fares to rise as Iran war pushes up jet fuel prices

By Admin

11 Mar, 2026

Air travel may soon become more expensive for passengers flying with Air India, as the airline has announced a phased fuel surcharge on both domestic and international routes. The move comes in response to a sharp rise in aviation turbine fuel (ATF) prices triggered by supply disruptions linked to the ongoing Iran war and geopolitical tensions in the Gulf region.

The airline confirmed that the surcharge will apply not only to its main operations but also to flights operated by Air India Express. According to the company, rising fuel costs have significantly increased operational expenses, forcing the airline to introduce additional charges to maintain services.

Why Air India Is Increasing Flight Fares

Air India said the fuel surcharge is due to the sharp rise in aviation turbine fuel (ATF) prices since early March 2026, largely caused by supply disruptions in the Gulf region amid escalating geopolitical tensions.

Fuel is one of the largest cost components for airlines. The company noted that ATF accounts for nearly 40% of an airline’s operating costs, making airlines highly sensitive to fluctuations in global fuel prices. When jet fuel becomes more expensive, airlines often have little choice but to increase fares or introduce surcharges to offset the additional costs.

The situation is even more challenging in India because ATF is subject to high excise duties and value-added tax (VAT), particularly in major aviation hubs like Delhi and Mumbai. These taxes further raise the overall cost burden for airlines operating in the country.

Phased Increase in Fuel Surcharge

Air India has announced that the fare increase will be implemented in three phases, affecting different routes gradually.

Phase 1: Domestic and SAARC Routes

The first phase will apply to domestic flights and routes within the South Asian Association for Regional Cooperation (SAARC). This includes destinations such as Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan, and Sri Lanka.

Passengers traveling on these routes will see a fare increase of ₹399 per ticket.

Phase 2: Selected International Routes

The second phase will extend the surcharge to several international destinations:

• West Asia: $10 surcharge
  
  

• Southeast Asia: $20 surcharge
  
  

• Africa: $30 surcharge
  
  

This phase will affect travelers flying to major business and tourism destinations across these regions.

Phase 3: Far East Destinations

The third phase will cover routes to Far East destinations such as Hong Kong, Japan, and South Korea. Air India said details about the exact surcharge for these routes will be announced later.

Currently, Phase 1 and Phase 2 are being rolled out, while Phase 3 is planned for a later stage.

Existing Tickets Will Not Be Affected

Air India clarified that tickets already issued before the surcharge implementation will not be affected. However, passengers who modify their travel dates or change their itinerary may need to pay the updated fare that includes the new surcharge.

This clarification is aimed at ensuring that passengers who booked early will not face unexpected additional costs unless their booking details change.

Why the Airline Says the Surcharge Is Necessary

Air India emphasized that the fuel surcharge is essential to maintain flight operations. According to the airline, operating flights without adjusting fares could make certain routes financially unsustainable.

The company stated that without the surcharge, some flights might not be able to cover operating costs and could face cancellation. Introducing the surcharge helps airlines maintain route networks and ensure continuity of services.

The airline also noted that Air India Express currently does not levy fuel surcharges on its flights, but the broader surcharge policy announced by the Air India group includes flights operated by the airline.

Future Review of the Surcharge

Air India said the fuel surcharge will not necessarily be permanent. The airline plans to review the surcharge periodically, adjusting it depending on how global fuel prices and the geopolitical situation evolve.

If jet fuel prices stabilize or fall, the airline may revise or remove the surcharge in the future.

Conclusion

The ongoing geopolitical tensions in the Gulf region and rising jet fuel prices are already impacting the aviation industry. With Air India introducing a phased fuel surcharge, passengers can expect slightly higher ticket prices in the coming months.

While the increase may add to travel costs, the airline says the measure is necessary to sustain operations amid rapidly rising fuel expenses. For travelers planning domestic or international trips, keeping an eye on fare changes and booking early could help manage travel budgets as the situation develops.