IndiGo re-imposes fuel surcharge on domestic flights

Related Articles

IndiGo plans to raise Rs 4000 crore by QIP to combat pandemic induced losses

August 10, 2020

Indigo’s Q1FY21 results analysis: Highlighting the depth of the challenges

July 30, 2020

Indigo Q4FY20 results: Is India likely to see an airline failure? Indigo’s results point that way

June 3, 2020

Marking an increase in airfares thanks to rising global oil prices, India’s largest domestic airline IndiGo has re-imposed a fuel surcharge on all domestic flights from today. The Indian Rupee has also been under pressure and has been steadily declining against the Dollar.

With the airline claiming a 25% increase in Aviation Turbine Fuel (ATF) prices, IndiGo will impose a fuel surcharge of ₹200 on flights of less than 1,000 kilometres, and ₹400 on those longer than 1,000 kilometres. Bangalore Aviation expects other airlines to follow suit.

This is a smart move by IndiGo. By imposing a “reviewable” fuel surcharge, it can gauge any effect the price rise has on passenger numbers. India’s dizzying 26% passenger growth rate is fuelled to a large extent by Tier-II cities which are price sensitive. India’s airlines are adding capacity incessantly and the cut-throat competition has seen airfares fall by almost half in the last decade, when adjusted for inflation.