Budget airlines lose edge as fuel surcharges come into play
Indian budget airlines have increased fuel surcharges due to rising aviation turbine fuel costs, narrowing the price gap with full-service international carriers. Consequently, passengers are increasingly opting for foreign full-service airlines that offer better amenities for a marginal price difference.
Why it matters
This shift in consumer behavior could force Indian budget carriers to re-evaluate their pricing strategies and service offerings to remain competitive.
With domestic airlines imposing fuel surcharges following a hike in aviation turbine fuel (ATF) prices, the fare gap between Indian and foreign carriers on many international routes has narrowed significantly, making foreign full-service airlines a more attractive option for passengers. On popular West Asian routes, the difference in fares between Indian budget carriers and foreign full-service airlines has narrowed to around ₹1,000–2,000. The marginal price difference is prompting passengers to consider foreign carriers, which offer better services and additional benefits than budget airlines.
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