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From September 1, 2026, another big blow has been dealt to the pockets of the general public and air passengers. The country's major government oil marketing companies (OMCs – like IOCL, BPCL, HPCL) have sharply increased the prices of aviation turbine fuel (ATF/Jet Fuel). There has been a huge increase in the price of ATF by ₹6.28 per liter (about 5.46%) for domestic airlines.

This is the second consecutive month that aviation fuel prices have been increased after an increase of ₹5 per liter on August 1. This increase, which happened just before the festive season (Ganesh Chaturthi, Navratri and Diwali), has increased the concern of passengers whether air travel will also become expensive.

In the aviation industry, jet fuel constitutes the largest part of the total operating cost of any airline:

• 35% to 45% stake: 35% to 45% of the total operational cost of any airline is spent on ATF alone.

• Direct pressure: Whenever ATF prices rise due to international crude oil and refining margins, the profit margins of airlines come under direct pressure.

• Compulsion to pass the cost: In this highly competitive and low margin sector, airlines are left with little option but to ultimately pass on the burden of rising input costs to passengers.

The impact of the increase in ATF prices by ₹ 6.28 per liter on ticket prices can be seen in these 3 ways:

1. Amendment in Fuel Surcharge

Airlines usually revise the 'fuel surcharge' charged directly on the ticket rather than increasing the base fare. This may see an additional increase of ₹ 200 to ₹ 800 per ticket on both short-haul and long-haul domestic routes.

2. Festive Season and Dynamic Pricing

From September to November, the demand for domestic flights is at its peak due to the festive and holiday season in India. The ticketing system of airlines works on 'dynamic pricing'. High fuel costs and high demand combined can make last-minute tickets costlier by 15% to 25% on peak routes (e.g. Delhi-Mumbai, Delhi-Bengaluru, Patna, Kolkata).

3. Budget airlines are most affected

The profitability of low-cost carriers (LCCs) like IndiGo, SpiceJet and Air India Express is directly tied to fuel prices. With jet fuel becoming expensive for the second consecutive month, budget airlines may cut their discounted and promotional fares.

If you're planning a trip home or a vacation for the upcoming festivals—Dussehra, Diwali or Chhath Puja:

• Early Booking: Book tickets at least 30 to 45 days in advance instead of last-minute booking, as dynamic fares can go up significantly as we approach festival dates.

• Credit Card and Bank Discounts: Take advantage of bank rewards, no-cost EMI or cashback offers available on booking portals to mitigate the impact of increased fuel charges.