A notable increase in air fuel charges has been made by Air India in order to accommodate the rapid rise in the cost of jet fuel used for flights within the country as well as overseas. Such an increase in fares is especially timely due to the sudden departure of Campbell Wilson as the CEO and MD of the company, coupled with the current energy crisis due to the unrest in West Asia.
The revised pricing policy in terms of domestic flights involves an increase in fares from one standard rate to one which varies according to distance traveled, thus being directly linked to the amount of fuel used. From 9:01 am on April 8, passengers on short-haul flights under 500 km will see an additional charge of ₹299. This graduated scale climbs to ₹899 for the longest domestic journeys exceeding 2,000 km. It is worth noting that these charges are applied per sector; therefore, a traveller with a stopover — for instance, flying from Delhi to Bengaluru via Mumbai — will be required to pay the surcharge for each individual leg of the trip.
The impact is even more pronounced on the airline's international routes. Passengers heading to Europe will now face a surcharge of $205 per sector, while those travelling to North America or Australia must pay an additional $280. There have also been increases in routes to Southeast Asia and West Asia worth $100 and $50, respectively.
This increase becomes a must due to the alarming figures in the market. As of March end, jet fuel costs worldwide have increased to $195.19 per barrel, up from $99.40, which was its figure only a month back. Compounding this suggests a rise in "crack spreads," or refining margins, which have jumped from $27.83 to $81.44 per barrel in few weeks. Nevertheless, Air India admits that the introduction of such increased fees will result in Air India covering a substantial amount of additional expenses, especially relating to its long-range flights overseas.
Given that fuel constitutes the biggest cost factor for any airline company, it should be stated that this decision is indicative of an increasing tendency towards such changes due to the pressure in the global air transport industry. Specifically, the continued rise in oil prices owing to the geopolitical situation leads Air India to consider further increasing its surcharges from time to time.
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