IndiGo announces removal of fuel charges amid ATF price drop

IndiGo, one of India’s leading airlines, announced on Thursday, 4 January 2024, that it would eliminate fuel charges on all domestic and international flights. This decision comes in response to a notable reduction in aviation turbine fuel (ATF) prices. The airline emphasized that the change would take effect immediately.

The imposition of the fuel charge was initiated in October 2023, following a surge in ATF prices. This marked the fourth consecutive hike, reaching Rs. 1,18,199.17 per kiloliter—a 5.14% increase from the previous month and a 2.32% year-on-year hike.

However, November 2023 witnessed a turnaround, with ATF prices experiencing a nearly 6% decline. The downward trend persisted into the new year, with jet fuel prices dropping for the third consecutive month by 3.9% to Rs 1,01,993.17 per kiloliter in Delhi.

Initially, IndiGo had communicated that the fuel charges would vary from Rs 300 to Rs 1,000, depending on the distance traveled. Given that ATF can constitute nearly 40% of an airline’s costs, the removal of these charges is expected to bring considerable relief, particularly for passengers choosing low-cost airlines.

The airline conveyed in its official communication that, due to the dynamic nature of ATF prices, it would persist in adapting its fare and related components to align with any alterations in prices or market conditions and provide punctual, courteous, and trouble-free travel experiences for its customers.

Despite the challenges posed by fluctuating fuel prices, IndiGo reported a consolidated net profit of Rs. 188.93 crore for the quarter ending on 30 September 2023. Notably, the airline’s revenue from operations recorded a robust growth of 18.57%, reaching Rs 14,944 crore compared to the corresponding period last year, which stood at Rs 12,498 crore.