IndiGo scraps fuel charge, tickets to get cheaper with ATF price drop

Indigo, India’s largest airline, has withdrawn fuel charges it imposed on domestic and foreign routes due to the recent decline in the jet fuel (ATF) prices over the past few months.

The fuel charge, announced by the airline in early October, was based on distance slabs and varied between Rs 300 and Rs 1,000 per sector.

“IndiGo, India’s leading airline, is pleased to announce the removal of fuel charge applicable on its on domestic and international routes, effective January 04, 2024. The fuel charge had been introduced in October 2023, following a surge in aviation turbine fuel (ATF) prices. With recent reduction in ATF prices, IndiGo is withdrawing the charge,” IndiGo said in a statement, reports Indian Express.

The airline added that it will continue to adjust fares “to respond to any change in prices or market conditions” considering the dynamic nature of ATF prices.

The fuel charge was introduced at the onset of the peak festival travel season, followed by four consecutive monthly hikes in jet fuel prices, reaching its peak in 2023 by early October.

ATF prices have since seen three consecutive reductions. Jet fuel prices have declined nearly 14 per cent since October.

“The decision follows the significant increase in aviation turbine fuel (ATF) prices, which have surged in the last three months with consecutive price hikes every month. ATF accounts for a substantial portion of an airline’s operating expenses, necessitating fare adjustment to address such a cost surge. Under this pricing structure, passengers booking IndiGo flights will incur a fuel charge, per sector, based on the sector distance,” the carrier said in a statement,” IndiGo had said in October while announcing the charge.

ATF is a major cost for airlines, accounting for over 40 per cent of operational expenses for Indian carriers.

In India, ATF prices are deregulated and are aligned with global rates,. As international crude oil prices, which reached $97 per barrel in September, have declined, jet fuel prices have similarly eased in the global market.

At present, ATF is priced at Rs 1,01,993.17 per kilolitre (kl) in Delhi, as per information from the country’s largest fuel retailer Indian Oil Corporation. In October, jet fuel was priced at Rs 1,18,199.17 per kl.

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