Last week, the GMR Group, which runs the Delhi International Airport, proposed to hike the user development fees to the Airports Economic Regulatory Authority of India (AERA) in the range 100% to 1,000%. Under the proposal, Delhi International Airport wants to levy a higher price for international business class passengers than economy class passengers. The Delhi International Airport also has proposed a hike in the landing and parking charges for aircraft.
If the proposals are accepted, flying in and out of Delhi would become expensive.
“IATA is concerned about the significant tariff increases proposed for the upcoming regulatory cycle for Delhi Airport. The proposed new differential tariff structure is excessively complex and onerous on both passengers and airlines and goes against ICAO’s principle of non-discrimination in airport charges,” Amitabh Khosla, country director- India, IATA, told Mint.
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IATA has urged AERA to reject this ‘complex’ and ‘discriminatory’ tariff structure proposal involving aircraft type, flight timing, and other variables. Khosla also said that IATA is encouraging AERA to address the differential between the domestic and international landing fees and user charges.
“We have asked AERA to moderate the proposed charges increase, including maintaining a realistic view of the investments, costs and returns to the airport operator to ensure that airport users are protected,” said Khosla.
New proposal
Delhi International Airport Ltd (DIAL), the GMR-led joint venture that operates the Delhi airport, has suggested to AERA that it allow 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 morning 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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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 and 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.
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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 landing at Delhi airport 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.
Delhi airport last increased the UDF in 2019, when it increased the fees paid by passengers for the maintenance and upkeep of the airport from ₹10 for domestic flights and ₹45 for international flights to ₹52 for domestic flights and ₹154 for international flights.
Need For Speed
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.
“DIAL has recently completed the Phase 3A expansion project, incurring huge capex of over ₹12,500 crore, a considerable portion of which is from borrowings. At the end of December 2024, DIAL has an outstanding debt of over ₹15,000 crore, out of which one series of bonds to the extent of $522 million is falling due for maturity in October 2026.”
