Last year, India’s largest airline – IndiGo introduced an additional fuel surcharge for passengers travelling with the airline. This surcharge was added in the ticket prices of IndiGo. As a result of which, fare prices on certain routes went high. Now, the airline has removed the additional duty.
IndiGo Fuel Surcharges
On October 5, 2023, IndiGo announced that because of a substantial increase in the Aviation Turbine Fuel (ATF) prices in India, the airline decided to levy an additional fuel surcharge from passengers travelling. These surcharges were added to the passengers tickets. Based on the kilometres of journey, the charges varied. If a passenger is travelling somewhere between 0-500 kms, he was needed to pay Rs 300 as fuel charges. For 1001-1500 kms, the charge was Rs 650. For any distance after 3,500 kms, the charges were Rs 1000. More Details are in the Table Below :
|Distance of Flight
|Fuel Surcharge (Rs)
|3500 and above
With this additional fuel surcharge, IndiGo was expected to earn Rs 90-100 crore on a weekly basis, strengthening its balance sheet. This was not the first time that IndiGo was levying those charges. In 2018 as well. the airline charged such fares, when ATF prices went sky high.
IndiGo Removes Levy, Ticket Prices to Drop
IndiGo, on January 4th announced that the airline has removed the additional fuel surcharges from now. In a statement, it said – With effect from January 4, 2024, IndiGo is happy to announce the elimination of fuel charges for both domestic and international routes. The fuel cost was implemented in October 2023 in response to an increase in the cost of aviation turbine fuel (ATF).
This removal comes at a time, when ATF prices have witnessed reduction for the third consecutive month. Now, the price is Rs 1,01,993.17 per kilolitre in Delhi. In other cities, it is different. Since November 2023, ATF prices are down by 6 percent.
This move will provide relief to the passengers, as ticket fares will reduce. For IndiGo, ATF prices covers 40% of its total expenses. Reduction in ATF prices is a win-win situation for both airline as well as customers.
In its statement, the airline said – We will continue adjusting our fares and their component parts in response to any changes in market conditions or ATF prices, as they are subject to changes. IndiGo is firm in its commitment to provide its clients with reasonably priced, punctual, polite, and hassle-free travel.
Possible Increase in Bookings?
In December, the traffic in Indian Aviation industry peaked. The industry handled a total of 13.8 million customers domestically. One of the biggest reasons for the peak was low and discounted fares introduced by the airlines. With this move, ticket prices will go down. It will be interesting to see, whether this will result in increasing number of passengers for IndiGo airlines. Already, the airline handles a market share of more than 60 percent.
In the quarter ending September 30, IndiGo reported a net profit of Rs 188.93 crore with operational revenue increasing by 19.57 percent. Revenue increased to Rs 14,944 crore. In 2023, IndiGo became the first airline to cross market value of Rs 1 lakh crore. It also became the first ever airline to handle 100 million passengers within a calendar year.