New Delhi: India’s largest budget airline IndiGo announced on Thursday that it has scrapped the fuel charge on its tickets, which it had imposed in October 2023 to cope with the rising jet fuel prices. The airline said that the fuel charge, which ranged from Rs 300 to Rs 1,000 depending on the sector distance, has been removed with effect from Thursday, January 4, 2024.
The airline said that the decision to withdraw the fuel charge was taken given the recent reduction in the prices of Aviation Turbine Fuel (ATF), which is the main component of the operating costs of an airline. “As ATF prices are dynamic, we will continue to adjust our fares and components thereof, to respond to any change in prices or market conditions,” IndiGo said in a statement.
The removal of the fuel charge will result in a significant fall in the ticket prices of IndiGo, which operates over 1,500 flights per day across domestic and international destinations. The fuel charge was levied by IndiGo on October 5, 2023, after the ATF prices had surged by over 50% in the previous year, due to the global oil market fluctuations and the depreciation of the Indian rupee.
The fuel charge was applicable on all the routes of IndiGo, both domestic and international. The charge was based on the sector distance, which is the distance between the origin and destination airports. The charge was Rs 300 for a sector distance of up to 500 km, Rs 400 for 501-1,000 km, Rs 550 for 1001-1500 km, Rs 650 for 1,501-2,500 km, Rs 800 for 2,501-3,500 km, and Rs 1,000 for 3,500 km and above.
However, in the last two months, the ATF prices have declined by over 10%, due to the easing of the oil supply crunch and the appreciation of the Indian rupee. According to the Indian Oil Corporation, the ATF price in Delhi was Rs 64,323 per kilolitre on January 1, 2024, down from Rs 71,881 per kilolitre on October 1, 2023.
“With the recent reduction in ATF prices, IndiGo is withdrawing the charge,” the airline stated, adding that it will pass on the benefit of the lower fuel cost to its customers. The airline said that it will continue to offer low fares and high-quality service to its passengers.