Air India will introduce a fuel surcharge on domestic and international tickets from March 12 as jet fuel prices rise sharply following the ongoing conflict in the Gulf region. The airline said the surcharge would be implemented in phases and apply to all new bookings made from 00:01 hours on March 12.
Under the first phase, passengers travelling on domestic routes and within the South Asian region will pay a surcharge of Rs399 per ticket. Flights to West Asia will attract a surcharge of $10. For Southeast Asia routes, the surcharge will rise from $40 to $60, while flights to Africa will see the charge increase from $60 to $90.
A second phase of surcharges will come into effect for bookings made from March 18. The surcharge on Europe routes will increase from $100 to $125. Flights to North America and Australia will see the charge rise from $150 to $200.
The surcharge will apply only to new bookings.
The airline said the move was necessitated by a sharp rise in aviation turbine fuel (ATF) prices, which account for 35 to 40 percent of an airline’s operating costs. High excise duty and value added tax on ATF in major metro cities such as Delhi and Mumbai have further amplified cost pressures for carriers operating in India.
“In the absence of such fuel surcharges, it is likely that some flights would be unable to cover operating cost and would have to be cancelled,” the airline said.
The cost pressures come amid the escalating Iran war, which began on February 28 after coordinated US and Israeli strikes on Iran that killed the country’s supreme leader Ayatollah Ali Khamenei. Iran responded with missile and drone attacks across the region, raising security risks and disrupting trade and travel routes.
Several countries in West Asia subsequently closed their airspace, including Iran, Iraq, Israel, Qatar and Kuwait. The restrictions affected one of the busiest aviation corridors linking Asia with Europe and Africa.
For airlines, the closures have meant widespread cancellations and longer routes. Flights are being diverted north through Central Asia or south via Egypt and the Arabian Sea, adding several hours to journey times and increasing fuel consumption. In the first three days of the conflict alone, Indian airlines cancelled more than 1,100 international flights and are estimated to be losing Rs150-Rs 200 crore a day.
Oil markets have also reacted sharply to the conflict. Brent crude briefly surged past $100 a barrel as investors feared disruptions to supplies from the Gulf region. Markets were particularly concerned about the Strait of Hormuz, a narrow shipping channel through which nearly a fifth of the world’s oil moves.
Prices later fell sharply after US President Donald Trump suggested the conflict could end quickly. Brent dropped more than 10 percent from its peak following those remarks. However, Trump later warned Iran against interfering with shipping through the Strait of Hormuz and said the US would respond strongly if global oil flows were disrupted.
Higher oil prices have pushed up jet fuel costs for airlines globally. In Delhi, ATF has increased to Rs96,638 per kilolitre as of March 1, up from Rs91,393 on February 1 and Rs92,323 at the start of January.
For Indian carriers, the disruption has been significant as West Asia is a key aviation hub linking India with Europe and North America. The region accounts for roughly half of India’s international passenger traffic, and the closure of major air corridors has forced airlines to reroute flights, increasing flight times and fuel consumption.
In a release dated March 7, Air India group said services to several West Asian destinations remained suspended because of airspace restrictions, while flights to Jeddah in Saudi Arabia and Muscat in Oman continued as those airspaces remained open.
The airlines have also been operating additional ad hoc flights to the United Arab Emirates to bring stranded travellers back to India, including services to Dubai, Abu Dhabi, Sharjah and Ras Al Khaimah.
Despite partial resumptions on some routes, flights to destinations such as Bahrain, Doha, Kuwait, Riyadh and Dammam remain suspended until at least March 13.
Air India said it will review the surcharge periodically depending on how fuel prices and the geopolitical situation evolve.
First Published: Mar 11, 2026, 12:34
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