Budget passenger carrier IndiGo on Tuesday said that it has decided to reintroduce fuel surcharge on the back of a sharp uptick in the price of Aviation Turbine Fuel (ATF).
According to the company, it will reintroduce fuel surcharge on domestic flights effective from May 30, 2018.
The development assumes significance as jet fuel represents around 40 per cent of an airline’s operations cost.
Further, the company said that depreciation in the Indian rupee has become an additional cost burden.
Accordingly, the airline will levy a sum of Rs 200 on routes less than 1,000 km distance, and Rs 400 on routes longer than 1,000 km distance.
“With ATF prices in India having risen around 25 per cent in the current month compared to the same period last year, and at the highest in last three years, the airline is compelled to pass some of the increased cost burden to customers as a fuel surcharge,” IndiGo’s Chief Commercial Officer Sanjay Kumar was quoted as saying in a statement.
“In the context of the past decade, where air fares in India have reduced by nearly 50 per cent in real terms (i.e. adjusted for inflation), we are confident that this marginal increase in the form of fuel surcharge will not have any significant adverse impact on demand.”