Delhi, Mumbai airport passengers may face massive user fee hike; here’s what’s happening

Passengers travelling through Delhi and Mumbai airports reportedly may soon be required to pay substantially higher user charges, following a recent order by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). This change, which could see fees jump by up to 22 times, stems from a redefinition of tariff calculation methods for the period between the 2008-09 and 2013-14 financial years. 

According to a report in The Economic Times, the resulting under-recovery during this period means the two airport operators are now owed more than Rs 50,000 crore, with the shortfall to be recovered through increased fees levied on passengers, landing, and parking charges. The development is expected to make air travel more expensive and may hamper future passenger growth at India’s two busiest airports.

The TDSAT’s ruling has been challenged in the Supreme Court by the Airports Economic Regulatory Authority (AERA), domestic airlines, and major international carriers including Lufthansa, Air France, and Gulf Air, the report added. The Supreme Court bench of Justices Aravind Kumar and Nilay Vipinchandra Anjaria is scheduled to hear the case on Wednesday. 

Should the TDSAT order take effect, the user development fee (UDF) for domestic passengers at Delhi airport could rise from Rs 129 to Rs 1,261, while international passengers might see an increase from Rs 650 to Rs 6,356. At Mumbai airport, domestic travellers could pay Rs 3,856 instead of Rs 175, and international passengers could face charges as high as Rs 13,495, up from Rs 615, the report added. 

The dispute originates from the privatisation of the two airports in 2006 and longstanding disagreements over how to value assets for tariff purposes. The Airports Economic Regulatory Authority was only established in 2009, three years after the airports were transferred from the Airports Authority of India to private operators DIAL (now part of GMR Group) and MIAL (currently managed by the Adani Group). 

Due to inconsistencies in pre-handover investment data, a notional asset value system, the Hypothetical Regulatory Asset Base (HRAB), was created to determine the basis for tariff calculation, the report added.

Initially, AERA included only aeronautical assets – such as runways, terminals, and check-in counters – in its tariff-setting approach for the 2008-09 to 2013-14 period. However, Delhi and Mumbai airport operators argued that non-aeronautical assets, including duty-free shops, parking, and lounges, should also be considered. After the tribunal and later the Supreme Court previously sided with AERA’s methodology, the airport operators requested a review based on a 2011 letter from the Ministry of Civil Aviation.

In July, the tribunal reversed its earlier stance and ruled in favour of the airport operators, concluding that non-aeronautical assets should have been included in tariff calculations. The latest TDSAT order asserts that the two airports should have collected an additional Rs 50,000 crore through higher charges, to be recovered by increasing the UDF and other passenger fees.