Ticket price hike, outlook cuts: What IndiGo, Air India are doing as fuel cost surges

Airlines, including Air India, IndiGo, and United Airlines, have responded to rising fuel costs by increasing ticket prices and adding fuel surcharges

The surge in jet fuel prices triggered by the US-Israel and Iran war has led the global aviation industry to raise fares and revise financial outlooks Jet fuel prices have soared from $85 to $90 per barrel to $150 to $200 per barrel in recent weeks, putting pressure on the aviation industry, where fuel accounts for up to a quarter of operating expenses.

Air India announced a revision of its fuel surcharge from a flat domestic surcharge to a distance-based grid. (Bloomberg)

Airlines including Air India, IndiGo, and United Airlines, have responded to rising fuel costs by increasing ticket prices and adding fuel surcharges on many routes, while also raising baggage and service fees.

Many airlines are reviewing their financial forecasts, delaying expansion plans, and focusing on cost-cutting and efficiency measures.

AirAsia

The Malaysian airline AirAsia responded to the price rise by cutting 10% of flights across the group, with a surcharge of about 20% on fuel in general, the airline's executive said.

Air France KLM

Air France said it has planned to increase long-haul ticket prices to address surging fuel costs, with cabin fares set to rise by 50 euros (around Rs. 5000) per round trip.

Air India

Air India announced a revision of its fuel surcharge from a flat domestic surcharge to a distance-based grid. The airline said that passengers flying short-haul routes (0–500 km) will now pay an additional ₹299 per sector, while those on longer routes exceeding 2,000 km will be charged up to ₹899.

The Tata Group-owned carrier earlier said the new surcharge structure will come into effect from April 8 for domestic routes and April 10 for key international sectors

Air New Zealand

The airline was among the first to announce broad increases to ticket prices when the conflict broke out. Since the increase in fuel prices, Air New Zealand said it would slash flights through May and June and hike fares. It also suspended its full-year earnings forecast due to fuel market volatility.

Akasa Air

Another Indian airline, Akasa Air, announced a hike in fares last month, citing a “significant increase in the price of aviation turbine fuel." With effect from March 15, the airline said that it will introduce a fuel surcharge ranging from ₹199 to 1,300 on domestic and international routes on all new bookings.

The airlines also said that the new fares will not be applicable on any bookings made prior to 00:01 hrs on March 15, 2026.

Alaska Air

The US airline said it would increase fees for the first checked bag by $5 ( ₹462) and by $10 ( ₹925) for the second on its North American flights, as well as for its Hawaiian Airlines unit. It hiked prices for a third checked bag from $50 to $200.

American airlines

The US airlines also followed similar measures to increase checked baggage fees by $10 each for the first and second checked bags and by $150 for the third checked bag on domestic and short-haul international flights. The airline also trimmed certain benefits for economy passengers.

Delta Airlines

Delta said it would cut capacity by around 3.5 percentage points from its original plan and raise fees for checked bags in an attempt to offset soaring jet fuel costs, with an increase of $10 ( ₹925) on the price of first and second checked bags and a $50 ( ₹4,629) increase on the third checked bag.

Delta CEO said it would hold off on updating the full-year outlook given uncertainty over how long the fuel price spike would last.

IndiGo

India's biggest airline said it would introduce fuel charges on domestic and international flights, including new fuel surcharges of up to ₹950 per sector on domestic routes and ₹10,000 on long-haul international flights for all new bookings from April 2.

Pakistan International Airlines

The carrier said it will increase domestic fares by $20 ( ₹1,660) and international fares by up to $100 ( ₹8,300), citing higher fuel surcharges.

Turkish Airlines and Lufthansa

SunExpress, a joint venture between Turkish Airlines and Lufthansa, said it would impose a temporary fuel surcharge of 10 euros (1085) per passenger from May 1 on routes between Turkey and Europe. The surcharge will apply to bookings made on or after April 1 for departures on or after May 1.

United Airlines

United Airlines said it will cut unprofitable flights over the next two quarters as it prepares for oil prices to stay above $100 (RS 8,300) until the end of 2027, according to CEO Scott Kirby. The airline has managed to raise fares without significantly affecting bookings despite the surge in jet fuel costs, Chief Commercial Officer Andrew Nocella said. It is also increasing checked baggage fees by $10 ( ₹830) for the first and second bags on routes across the US, Mexico, Canada and Latin America.

(With inputs from Reuters)