Air India adds fuel surcharge to tickets. Here's why
Air India is tacking on a fuel surcharge to tickets after jet fuel prices soared, thanks to the ongoing U.S.-Iran conflict.
Jet fuel in Singapore has shot up 72% to $225.44 per barrel.
Since aviation turbine fuel (ATF) makes up a big chunk of airline costs (up to 45% of your ticket), these price hikes are hitting airlines (and passengers) hard.
War-risk insurance premiums and rerouting costs
On top of pricier fuel, Indian carriers are facing additional war-risk insurance premiums of about ₹30-40 lakh for narrow-body flights and around ₹90 lakh-₹1 crore for wide-body flights on routes such as Delhi-Dubai.
With Middle East shipments disrupted, ATF could get even costlier.
Rerouting to avoid conflict-affected Middle East airspace is lengthening flights to Europe and North America, raising fuel consumption and operating costs.
Other airlines are also raising fares
It's not just Air India feeling the pinch. Air New Zealand has raised all its fares as jet fuel now costs $150 to $200 per barrel (up from $85 to $90 before the conflict).
Cathay Pacific is sticking with its $72.90 surcharge on Hong Kong-Europe routes.
If tensions keep simmering, analysts say oil prices will likely stay high, and so will airfares.