International flyers set for lower fares as Air India reduces fuel surcharge

International air travellers could see lower ticket prices after Air India reduced its fuel surcharge on overseas routes from 1 July, following a fall in crude oil prices after months of elevated energy costs linked to the West Asia crisis.

According to The New Indian Express, the airline has cut the international fuel surcharge by 38% on routes to Europe and the UK, while passengers travelling to North America and Australia will see a 28.5% reduction.

The move comes after crude oil prices fell below $70 per barrel on 30 June, the lowest level since the regional conflict began on 28 February.

Lower surcharge expected to reduce ticket costs

The fuel surcharge is a key component of international airfares and was raised earlier this year as fuel costs climbed.

Under the revised structure:

• Europe and UK fuel surcharge has been reduced from $205 per passenger to $125.
• North America and Australia surcharge has been lowered from $280 to $200.
• The revised rates took effect from 1 July.

Sources quoted by The New Indian Express said the reduction will be passed on to passengers, adding that even a modest percentage reduction can result in meaningful savings on long-haul international fares.

Other airlines may also revise fares

According to the report, other Indian airlines operating international services could also reduce fares because government directives require airlines to pass on lower fuel costs to customers.

IndiGo did not officially comment on the matter, although sources indicated the airline would also be expected to reflect the lower surcharge in its pricing.

Air India Express said it would respond later regarding any fare revisions.

SpiceJet, which operates international services to Dubai, said it had not increased its international fuel surcharge during the peak of the West Asia crisis. The airline said the latest reduction therefore does not apply to its fares.

ATF prices ease as Gulf operations recover

Domestic aviation turbine fuel (ATF) prices also declined on 1 July, falling to around ₹1.10 lakh per kilolitre from ₹1.25 lakh per kilolitre. However, an airline source told The New Indian Express that the reduction in domestic ATF prices is unlikely to be reflected in domestic passenger fares.

The easing fuel prices coincide with the gradual normalisation of flight operations across West Asia.

On Thursday, Air India Express announced it had restored connectivity across its West Asia network by resuming services to Salalah in Oman and Kuwait. Flights on the Kozhikode-Salalah route resumed on 2 July, while services between Kozhikode and Kuwait restarted on 3 July. Flights between Bengaluru and Kuwait are scheduled to resume from 4 July, with frequencies increasing in phases.

Lower fuel costs and improving regional conditions are expected to support a broader easing of international airfares if airlines continue adjusting fuel surcharges in line with market conditions.