Indian airlines are contemplating removing the fuel surcharge as global crude oil prices decrease, potentially bringing relief to air passengers soon. NDTV Profit reported that airlines are actively assessing the possibility of rolling back the surcharge, with a decision expected by the end of the second quarter or early in the third quarter. This review follows a significant drop in global crude oil prices from recent highs.
With fuel costs showing a notable decline, airline executives are cautious and evaluating the sustainability of this trend before making a final call, considering the unpredictable nature of global energy markets. Carriers are currently in a wait-and-watch mode, deliberating whether to completely eliminate the surcharge or opt for a phased withdrawal that balances passenger affordability with profitability.
Notably, domestic routes are likely to witness the surcharge removal before international services, where fuel expenses and operational economics pose relatively greater challenges, as per sources familiar with the matter. Major airlines such as Air India, IndiGo, and Akasa Air had introduced fuel surcharges in March to counter the surge in crude oil and ATF prices, which significantly raised operational costs.
As fuel prices show signs of easing, airlines have initiated internal discussions regarding the timing and extent of the surcharge rollback. Discussions are also ongoing within the industry on a gradual withdrawal of the surcharge to enhance competitiveness in air travel while ensuring profitability post a period of heightened fuel expenses.
