IndiGo Introduces a Distance-Based ‘Fuel Charge’ Amid Rising ATF Prices; Full Details Inside
IndiGo, the industry leader in domestic aviation, has just strategically added a distance-based “fuel charge” that ranges from Rs 300 to Rs 1,000 on all of its flights, with immediate effect.
The decision was made in reaction to rising aviation turbine fuel (ATF) prices. SpiceJet has also made vague references to implementing a similar fuel surcharge while soliciting feedback from other significant airlines.
It is no secret that the aviation sector is dealing with a number of difficulties. Airlines are in a difficult situation as a result of the combined pressures of rising jet fuel costs and a weakening rupee, especially when paying for expenditures that are tied to the dollar.
IndiGo clarified their choice in a recent statement, stating, “We are adding a fuel fee on our local and international flights, starting as of October 6, 2023. This action was taken in reaction to the sharp rise in ATF costs, which have risen month after month over the last three months. We have to make changes to account for these increased prices since ATF makes up a significant portion of an airline’s operational expenditures. Customers who book IndiGo flights will now pay a fuel fee dependent on the length of their trip under this new pricing system.
THE NEW FUEL CHARGES FOR INDIGO
The following fuel charges will apply to passengers under this new pricing structure: Rs 300 (taxes additional) for sectors up to 500 km in length; Rs 400 for sectors 501–1,000 km; Rs 550 for sectors 1,001–1,500 km; Rs 650 for sectors 1,501–2,501 km; Rs 800 for sectors 2,501–3,500 km; and Rs 1,000 for sectors beyond 3,501 km.
“ATF prices are up 5.1% over the last month and are up 2.32 percent compared to October 2022,” said aviation expert Ameya Joshi. Airlines are under a great deal of stress due to a falling rupee. Although the gasoline surcharge may help in certain ways, travellers may not get the full benefit of the rise in ATF prices.
Indian airlines have long lobbied for government assistance in the form of tax remission on ATF, but their requests have not yet received a response. The Value Added Tax (VAT) on ATF has been decreased in several states, although Delhi and other states still charge hefty rates. Indian airlines have always had to pay high operating expenses, mostly because of the high ATF prices, which are further exacerbated by high state and federal taxes and customs.
