On Thursday, IndiGo, which has over 63% market share, said it will levy a fuel surcharge of ₹300-1,000 on every ticket beginning 6 October.

SpiceJet is also planning a fuel surcharge, an airline executive said.

“Fares were already trending higher for the festive months of October and November due to high travel demand. Additional fuel charges by airlines will increase fares by ₹400-500 across key routes. For example, an IndiGo Delhi-Mumbai one-way flight was costing ₹4,700 on average, and now, it is ₹5,300,” Manan Bajoria, group vice-president, growth at ticket booking platform ixigo said.

Data from ixigo shows the average one-way advance airfares on the Delhi-Bengaluru route have increased to around ₹7,500 from nearly ₹6,300 earlier, while Delhi-Hyderabad is up to nearly ₹5,400 from about ₹4,600 earlier.

Jet fuel prices in Delhi rose for a fourth consecutive month to reach ₹118,199.17 per kilolitre (kl) on 1 October, a 32% spike since June. It is also nearly 89% higher than ₹62,687 per kl in December 2019.

“ATF accounts for a significant 30-40% of the total cost for an airline. Airlines are planning to pass on such an increase in the ATF prices to their customers through fuel surcharge so that their revenue per available seat km-cost per available seat km spread does not get impacted materially,” said Kinjal Shah, co-group head-corporate ratings, Icra Ltd.

Costlier jet fuel and steeper fares come during soaring domestic traffic. Air passenger traffic every month since January has been, on average, 8% higher than the corresponding pre-pandemic levels in 2019.

Apart from fuel prices, the grounding of Go Air has pushed up fares.

“Currently, the industry is witnessing some capacity constraints due to the grounding of certain aircraft for some airlines because of component scarcity and temporary suspension of operations of GoAir. Along with the significant increase in ATF prices, this will definitely lend pricing power to the airlines, thereby keeping the fares high,” Shah added.

Fares are dependent on various factors, said Nishant Pitti, CEO and co-founder of EaseMyTrip. “It is noted that the maximum amount surcharge for the longest routes (for IndiGo) will be ₹1,000. This, however, is only the fuel cost that will be reflected in airfares. Airfares are dynamic in nature, and changes in airfares are a result of many other contributory factors,” Pitti said.

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Updated: 06 Oct 2023, 11:47 PM IST