Government Looking to Talk with Airlines Amid Fuel Surcharge 

The Centre is likely to intervene and hold conversations with airlines after some carriers raised fuel surcharges in response to the recent increase in aviation turbine fuel (ATF) costs. The government’s priority remains to ensure that passengers are not unduly burdened by higher fares.

Officials said the government has not yet issued an order but is seeking clarification from airlines on pricing changes. The action comes amid concerns that rising fuel costs may be passed on to consumers in a price-sensitive market.

The calculated increase in ATF costs has already occurred, with the government permitting a larger 25% increase to boost the aviation industry. To mitigate the impact on passengers, the effective increase for domestic operations was limited to approximately 8.5%. Fuel accounts for roughly 40% of airline operating costs, making ATF an important pricing component.

After the change, ATF costs for international operations and chartered aircraft nearly quadrupled to Rs 2,07,341.22 per kilolitre from Rs 96,638.14, while domestic ATF increased to Rs 1,04,927.18 per kilolitre.

Despite the Centre’s efforts to prevent fare rises, IndiGo implemented higher fuel surcharges. The airline changed from a flat Rs 425 charge to a distance-based structure ranging between Rs 275 and Rs 950 for domestic itineraries, alleviating the expense on shorter journeys.

On international routes, however, the increase has been significant, with IndiGo boosting fuel surcharges by much to Rs 10,000 on long-haul sectors such as Europe, reflecting the huge surge in ATF prices for overseas operations. These increased charges went into effect on April 2.

The Centre’s action is expected to compel airlines to adjust their pricing or reduce further fees, thereby limiting fare hikes while the situation is closely monitored.

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