Air India suggests lower landing charges, concerned at user charges at Delhi Airport

Air India has expressed concern that Delhi International Airport Ltd’s (DIAL) proposal to significantly increase user development fees (UDF) and other aeronautical charges will hinder efforts to establish the airport as an aviation hub.

In a written response to the Airports Economic Regulatory Authority of India (AERA), the airline recommended reducing charges for wide-bodied aircraft to encourage the use of larger planes on domestic routes. 

DIAL has proposed raising landing charges for domestic wide-bodied aircraft from ₹188 per metric tonnes (MT) to ₹325 per MT, and for international wide-bodied aircraft from ₹250 per MT to ₹430 per MT. MT refers to the plane’s weight.

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DIAL for the fourth control period or for a period of 5 years from 1 April 2025 till 31 March 2029 has proposed a steep hike in UDF for domestic and international passengers, ranging from 100% to over 1,000%. Similarly, a hike in other aeronautical charges like landing and parking charges for aircraft have also been proposed.

As part of AERA’s consultation process, Tata Sons-owned Air India, in its written comments, said the proposed tariffs will have an impact on the goal to align with governments vision of making Delhi as India’s aviation hub. 

The airline has suggested, “The Variable Tariff Proposal needs to include incentive for increasing international to International traffic at Delhi airport, which may be introduced by AERA.”

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The airline has also suggested AERA consider reducing the landing charges for long-haul and ultra-long-haul flights by at least 30% on a per MT basis.

Air India has suggested AERA to reduce the UDF charges by 20%. As per the proposal of a variable tariff structure, DIAL has suggested to AERA that it allows it to charge a differential UDF amount to domestic passengers during peak and off-peak hours.

The airport has defined peak hours between 5:00 and 8:55 in the mornings and 5:00 and 8:55 at night. The airport has also suggested a dual pricing structure for international passengers flying in business class and economy class.

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Mark Martin, founder and chief executive officer (CEO) of Martin Consulting is of the view that the proposed hike must be looked at carefully. “GMR’s arbitrary proposal to hike UDF for passenger operations has to be checked and should be checked right now. For an airport which has in the past surpassed it’s peak capacity, leveraging such high UDF will be damaging to the industry,” said Martin. 

He added, “however landing charges increase although has come at a time after no rate escalations have happened from a long time. Sudden imposition of rates will be discomforting to airlines, however such rates are still considered low in comparison to international rates.”

Currently, the UDF for domestic and international passengers is set at ₹54 and ₹154, respectively. DIAL has proposed a UDF of ₹610 and ₹405 for domestic passengers for peak and off-peak hours, respectively, for FY26 to FY27. For FY28 and FY29, a UDF of ₹315 and ₹210 has been proposed for peak and off-peak hours, respectively. 

For domestic passengers, DIAL has proposed UDFs of ₹210 and ₹140 for peak and off-peak hours, respectively, for FY26 and FY27. For FY28 and FY29, a UDF of ₹115 and ₹80 has been proposed for peak and off-peak hours, respectively.

DIAL has proposed a UDF of ₹1,620 for business class and ₹810 for those travelling overseas for FY26 and FY27. For FY28 and FY29, UDF for business class passengers has been proposed at ₹860 and ₹430 for economy class passengers. 

DIAL has proposed a UDF of ₹570 for international passengers for business class and ₹280 for FY26 and FY27. For FY28 and FY29, UDF for business class passengers has been proposed at ₹300 and ₹150 for economy class passengers.

DIAL’s proposal to AERA stated that it has proposed higher aeronautical and non-aeronautical charges to cover the expenses borne to build additional infrastructure. 

“Under the proposed tariff plan, DIAL plans to front-load funds for infrastructure development by charging higher UDF rates during 2025-26 and 2026-27, followed by lower rates in subsequent years, ” the airport said in its proposal to AERA.

DIAL informed AERA that the proposal to charge less UDF from economy class travellers than from business class flyers has the potential to decongest the airport at peak hours and provide affordable fares during the non-peak hours.

DIAL also said that the new charges will aid in further airport development, which is expected to cater to an increasing number of international operations. The airport also said that it has been incurring losses in the past, and as per its estimates, losses for the current financial year are expected to be over ₹1,500 crore. 

Satyan Nayar, secretary general of Association of Private Airport Operators, said the hike is important for future growth. “The tariff revision and dynamic pricing structure proposed by DIAL to AERA for Control Period 4 is a progressive step toward ensuring sustainable aviation growth in India. Under the Public-Private Partnership model, periodic adjustments to UDF are essential to ensure private investors can recover capital expenditures and maintain world-class operations.”

AERA is expected to take a call on Delhi airport’s proposal in the coming few weeks.