The fuel surcharge, which the airline used in early October 2023, was eliminated on Wednesday. The airline’s fuel tariffs for early October 2023 were eliminated on Wednesday. The airline said the fuel tax was waived due to the recent drop in ATF (Aviation Turbine Fuel) prices.
IndiGo on Wednesday announced that it will no longer charge fuel for tickets, nearly three months after it imposed the tax in response to a spike in jet fuel prices.
In recent months, India’s largest airline, IndiGo, has waived fuel duty on local and international routes as the cost of aviation fuel (ATF) has come down
IndiGo announced fuel prices in early October, which depended on distance bands and ranged from Rs 300 to Rs 1,000 per zone.
“India’s leading airline IndiGo is pleased to announce the waiver of fuel surcharges on domestic and international routes with effect from January 4, 2024.” The fuel levy was implemented in October 2023 following an increase in aviation turbine fuel (ATF) prices.“In view of the recent fall in ATF prices, IndiGo is withdrawing the levy,” the airline said in a statement
Given the volatile nature of ATF pricing, the airline said it will continue to adjust fares “to respond to any change in prices or market conditions.”
The fuel surcharge was implemented at the start of the busy festival travel season, following four straight monthly increases in jet fuel prices, which had reached their highest in 2023 by early October. Since then, ATF prices have dropped three times in a row. Since October, jet fuel prices have dropped by approximately 14%.
“The decision follows a significant increase in aviation turbine fuel (ATF) prices over the last three months, with monthly price increases.” ATF accounts for a significant amount of an airline’s operating expenses, prompting pricing adjustments to accommodate for such a cost surge. “Under this pricing structure, passengers booking IndiGo flights will incur a fuel charge, per sector, based on the sector distance,” the airline stated in a statement in October.
IndiGo, the country’s largest airline by market share, previously stated that the fuel charges would range from Rs 300 to Rs 1,000, depending on the distance traveled. Given that ATF can account for approximately 40% of an airline’s costs, this decision is expected to provide significant relief to passengers on low-cost carriers.
“Because ATF prices are dynamic, we will continue to adjust our fares and components to respond to changes in prices or market conditions.” IndiGo remains committed to its goal of offering “affordable, on-time, courteous, and hassle-free travel for our customers,” the company said.
IndiGo recorded a consolidated net profit of Rs 188.93 crore for the quarter ending September 30, with revenue from operations increasing by 19.57 percent to Rs 14,944 crore compared to the same period the previous year.
InterGlobe Aviation, its parent firm, was trading 0.15 percent higher at Rs 2997.55 a share at roughly 2 p.m. on Thursday.
