Air India, Air India Express hike surcharges: How much more will UAE-India passengers pay?

Dubai: Following the announcement of a phased fuel surcharge hike by the Air India group, air passengers on the UAE-India sector will see a fixed increase in their flight ticket prices starting tomorrow, March 12.

As per the announcement, passengers flying between the UAE and India on Air India or Air India Express will pay $10 (around Dh36.70) more per ticket on new bookings made from March 12.

The surcharge, which currently does not apply to the Middle East region, is being introduced in the region in direct response to surging aviation turbine fuel (ATF) costs driven by the ongoing geopolitical tensions due to the US-Israel-Iran war.

Bookings made before March 12 will not attract the new surcharge, unless passengers make changes to their travel dates or itinerary.

Aviation turbine fuel costs account for nearly 40% of an airline's operating expenses. In India, these costs are further amplified by high Excise Duty and VAT levied in major cities such as Delhi and Mumbai. Air India has stated the surcharge is essential to cover operating costs and avoid flight cancellations, and that it will review the charges periodically as the situation evolves.

This is not the first time airlines have turned to fuel surcharges to stay afloat. Most recently, airlines globally reintroduced or raised fuel surcharges across several sectors from around 2022. This followed rebounding travel after the Covid-19 pandemic and a surge in fuel prices.

Travel agents in the UAE say the move was not unexpected. TP Sudheesh, General Manager of Deira Travels, said the development was very much on the radar for those in the industry.

"It is a reality, and it was already anticipated," he told Gulf News on Wednesday.

"Operating costs are a big overhead for airlines, and fuel charges are the biggest component of that. Most airlines are running into losses because of the energy crisis created by the war. They need to overcome this situation. Post-Covid, surcharges were reintroduced globally, and what we are seeing now is a continuation of that trend due to the war."

Safeer Mahmood, General Manager of Smart Travel Group, echoed the sentiment, saying the hike had been anticipated across the industry and had already begun playing out on a global scale.

"GCC national carriers may not be as impacted, but airlines from other countries that depend on energy supply from this region will be hit hard," he said.

"In the case of Air India and Air India Express, people flying between the GCC and India will be the largest group to be affected as these airlines are major market players on this route."

Safeer pointed out that the low-cost arm, Air India Express, is particularly significant for the large Indian expatriate community in the region, especially those from the south Indian state of Kerala.

"Middle-class people depend on these carriers, especially Air India Express. Around 75% of its flights operate to and from the Middle East. Most airports in Kerala are served by Air India Express, and Kerala has millions of residents living across the GCC," he said.

Despite the price increase, Safeer believes demand will hold firm. "Those who want to travel will definitely travel. Airfares are already high, and passengers are not likely to mind a Dh37 increase. They don't have any other option but to fly."

The Middle East surcharge is only part of the first phase of a broader, three-stage rollout. For passengers flying to other parts of the world on Air India, here is how fares will change:

Phase 1 — effective March 12

On routes to Southeast Asia, the surcharge rises by $20 to reach a revised total of $60, up from the existing $40. For Singapore, a fuel surcharge is being applied for the first time under Phase 1. Flights to Africa will carry a $30 increase, pushing the surcharge from $60 to $90.

Phase 2 — effective March 18

Passengers travelling to Europe will see the surcharge go up by $25, taking it from $100 to $125. For North America and Australia, the increase is steeper: a $50 hike on each, bringing the surcharge to $200 on both sectors, up from $150.

Phase 3 will cover Far East markets including Hong Kong, Japan, and South Korea, with details to be announced separately.