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IndiGo Raises Fuel Surcharge as Jet Fuel Costs Surge, Shares Drop

Government limits domestic jet fuel pass-through to about 25%, pressuring airlines to recoup costs through sector fees.

Overview

  • IndiGo, which revised its levy for tickets booked after 12:01 a.m. on Thursday, set domestic fuel charges at Rs 275–950 per flight segment and international at Rs 900–10,000.
  • Shares of InterGlobe Aviation fell during Thursday’s trade, sliding as much as 5% intraday, as investors weighed the risk that higher fares could slow passenger demand.
  • Emkay Global cut its IndiGo target price by 13% to Rs 5,500 and lowered FY26–28 earnings estimates by 7–28%, though it kept a Buy rating based on the carrier’s market position.
  • The airline said it recalibrated fees in response to a sharp jump in aviation turbine fuel, with IATA data showing regional jet fuel prices more than doubled month on month.
  • Oil marketing companies first lifted ATF steeply, then a policy move limited the effective domestic increase to about 25%, leaving international operations exposed to higher costs and pushing airlines to raise route-based surcharges.