Air India Imposes Surcharge As Gulf Crisis Drives Jet Fuel Prices Higher

Last Updated:March 10, 2026, 21:53 IST

The airline said the decision was necessitated by the steep increase in global jet fuel costs triggered by the geopolitical tensions in the Gulf region.

Air India said it will introduce a phased expansion of fuel surcharges across its domestic and international network after a sharp rise in aviation turbine fuel (ATF) prices driven by the ongoing crisis in West Asia. The airline said ATF accounts for around 40% of airline operating costs and prices have surged since early March 2026 due to supply disruptions linked to geopolitical tensions in the region. To manage the impact, Air India said it will roll out the revised surcharges in three phases across different route networks.

Phase 1, effective March 12, 2026, will apply to domestic and regional routes. The airline will add INR 399 to domestic India and SAARC routes. For international services, the surcharge will increase by USD 10 for West Asia routes, USD 20 for Southeast Asia routes- taking the total surcharge to USD 60- and USD 30 for Africa routes, raising the total to USD 90.

Phase 2, starting March 18, 2026, will cover long-haul flights. The airline will introduce a USD 25 increase for Europe routes, bringing the total surcharge to USD 125, while flights to North America and Australia will see a USD 50 increase each, raising the surcharge to USD 200.

Phase 3 will apply to Far East destinations, including Hong Kong, Japan and South Korea, with details to be announced at a later stage.

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Air India said the revised charges will apply only to new bookings, adding that existing tickets will not be affected unless passengers change travel dates or itineraries requiring a fare recalculation.

The surcharge adjustment comes as airlines worldwide face rising fuel expenses amid disruptions in global energy markets tied to the conflict involving Iran, Israel and the United States. Aviation fuel is typically one of the largest operating costs for airlines, making carriers particularly sensitive to volatility in global oil prices.

Industry executives also warned that rising crude prices could have broader implications for India’s aviation sector. Ajay Singh, chairman of SpiceJet, said Indian carriers may have to reassess their expansion plans if oil prices remain elevated, even around $90 per barrel.

“We don’t know where things are really going," Singh told Bloomberg, adding that domestic airfares are unlikely to remain stable as airlines may have no option but to introduce or expand fuel surcharges.

Read more: 11 Days That Shook West Asia: How The US-Israel-Iran War Escalated

He said carriers will likely need to pass on part of the increased costs to passengers despite the strong price sensitivity of the Indian market, suggesting domestic fares could rise.

Indian airlines including IndiGo, Air India and SpiceJet are among those most exposed outside West Asia as the Iran conflict enters its second week.

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