Air India Ltd. announced on Thursday that it will be reducing fuel surcharge on select international routes. The routes included in North America and Australia has its surcharge reduced to $200 from $280. Similarly European routes also saw its fuel surcharge decrease to $125 from $205.
The move comes after a sharp moderation in global crude oil prices and aviation turbine fuel (ATF) prices from their recent highs.
According to people familiar with the matter, airlines are actively evaluating a rollback of the surcharge, with a decision likely by the end of the second quarter or early in the third quarter.
While international jet fuel prices have declined significantly, airline executives believe fuel costs remain elevated compared with historical averages and are assessing whether the recent softening is sustainable before taking a final call.
Industry sources told NDTV Profit said carriers are currently in a wait-and-watch mode, weighing whether to remove the surcharge entirely or opt for a calibrated, phased withdrawal that balances passenger affordability with profitability.
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Domestic routes are likely to see the surcharge withdrawn before international sectors, where fuel costs and operating economics remain relatively more challenging, the sources said.
Air India, IndiGo and Akasa Air had introduced fuel surcharges in March after a sharp increase in crude oil and aviation fuel prices pushed up operating costs. The additional levy was aimed at offsetting the impact of higher fuel expenses without significantly altering base fares.
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