IndiGo re-imposes fuel surcharge on domestic flights

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.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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