Passengers to Shell Out More As IndiGo Passes Fuel Surcharge on Fare

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New Delhi: IndiGo has introduced an up to Rs 400 fuel surcharge on ticket to offset the impact of rising fuel prices. So passengers flying on IndiGo from Wednesday will have to pay more for flights. IndiGo is the first local carrier to announce passing on the burden of spiralling jet fuel prices to the passengers.

In the wake of a sharp uptick in the price of oil and the cost of Aviation Turbine Fuel (ATF), it has been decided to re-introduce fuel surcharges effective May 30, the airline said in a release. A sum of Rs 200 would be levied on every ticket on routes having less than 1,000 kilometre distance.

The amount would be Rs 400 on routes longer than 1,000 kilometre. "A marginal increase in airfares in the form of fuel surcharge will not have any significant adverse impact on the air-traffic demand," the release said. Aircraft fuel expenses account for around 40 per cent of the airline's operational costs, making it the single largest item of its total expenses.

"Furthermore, the depreciating Indian rupee is an additional cost burden on the Indian carriers. Given this scenario for a low-cost airline, levying a surcharge has become inevitable," the airline said. The airline also said that it would review the surcharge in the light of oil prices going forward, and endeavours to be in a position to withdraw it once oil prices have moderated.

IndiGo's chief commercial officer Sanjay Kumar said that with ATF prices in India having risen around 25% in the current month compared to the same period last year, the airline is compelled to pass some of the increased cost burden to customers as a fuel surcharge. "In the context of the past decade, where airfares in India have reduced by nearly 50 per cent in real terms (i.e. adjusted for inflation), we are confident that this marginal increase in the form of fuel surcharge will not have any significant adverse impact on demand," he noted.

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