Middle East Tensions Drive Up Airfares: Air India Levies Rs 399 Domestic Surcharge

Air travel is set to become more expensive for millions of passengers as the Air India Group rolls out fuel surcharges on both domestic and international flights in a phased manner. The airline announced the move following a sharp rise in Aviation Turbine Fuel (ATF) prices triggered by escalating geopolitical tensions in the Middle East, including the ongoing standoff between the United States and Iran.

According to the airline, ATF accounts for nearly 40 per cent of operating costs, and prices have surged since early March due to supply disruptions and rerouted flight paths caused by closed airspaces in the region.

Oil Supply Disruptions Drive Cost Surge

Airlines worldwide are grappling with rising fuel expenses as tensions around key oil transit routes such as the Strait of Hormuz threaten global supply chains. In addition to higher fuel prices, airlines are also dealing with longer flight routes to avoid restricted airspace, which increases fuel consumption and operational costs.

Industry experts warn that continued volatility in oil markets could put pressure on airline profitability and lead to broader fare adjustments across carriers.

Phase 1 Surcharge Begins March 12

The first phase of the surcharge rollout will come into effect from March 12, 2026, at 12:01 AM IST for new bookings.

Under Phase 1:

• Domestic and SAARC routes will see a surcharge of ₹399 per ticket, which was previously zero for many flights.

• Flights to West Asia and the Middle East will attract a $10 surcharge.

• Southeast Asia routes will see surcharges rise from $40 to $60.

• Flights to Africa will increase from $60 to $90.

Phase 2 to Raise Long-Haul Costs

A second round of increases will take effect from March 18, targeting long-haul international routes.

• Flights to Europe will see surcharges rise from $100 to $125.

• Routes to North America and Australia will increase from $150 to $200.

Later phases will extend the surcharge structure to destinations such as Hong Kong, Japan, and South Korea.

Existing Bookings Unaffected

The airline clarified that the surcharge will apply only to new bookings on flights operated by Air India and Air India Express. Passengers with existing tickets will not be affected unless their bookings are reissued or modified.

However, travellers planning long-haul journeys, particularly to Europe, North America and Australia, are expected to face the biggest fare increases in the coming weeks.

Airlines Seek Government Relief

Aviation industry experts say the continued rise in fuel costs and flight disruptions could significantly impact airline profitability. Several carriers are reportedly seeking relief from the government through tax reductions on ATF and the removal of fare caps to help offset rising operational expenses.

With global oil markets remaining volatile amid geopolitical tensions, travellers may need to prepare for higher airfares in the near future as airlines adjust to escalating costs. ✈️