Synopsis
The GMR Group's Delhi International Airport Ltd has requested a hike in user development fees and landing charges from the Airport Economic Regulatory Authority. If approved, these increases could significantly impact airfares, potentially raising them by 5-10%. Stakeholders have until March 3 to submit their feedback.Key Takeaways
- User Development Fee may rise for domestic and international passengers.
- Potential 5-10% increase in airfares.
- Consultations with industry stakeholders held on February 17.
- Landing fees for narrow-body and wide-body aircraft also set to increase.
- Impact on demand expected during low-traffic months.
New Delhi, Feb 19 (NationPress) The Delhi International Airport Ltd (DIAL), managed by the GMR Group, has submitted a request to the Airport Economic Regulatory Authority (AERA) for an increase in the user development fee levied on passengers, alongside proposed hikes in landing and parking fees for aircraft. If approved, these changes could result in higher airfares.
DIAL suggests that domestic travelers should pay Rs 610 as a user development fee (UDF) during peak hours and Rs 405 during non-peak hours for the financial years 2025-2026 and 2026-2027. For domestic arrivals, the proposed fee stands at Rs 140 during non-peak periods and Rs 210 during peak hours.
For international arrivals, economy and premium economy passengers would be charged Rs 280, whereas business class travelers would face a fee of Rs 570. For departures, the fee for economy class is proposed at Rs 810, while business class passengers might have to pay as much as Rs 1,620.
According to airline representatives, if GMR's proposed UDF increase is sanctioned by AERA, it could lead to a 5-10 percent hike in airfares.
AERA recently conducted discussions with stakeholders on February 17 regarding tariff updates for the fourth control period of IGIA, which spans from April 1, 2025, to March 31, 2029. This meeting included members from GMR Airports, domestic airlines, and the International Air Transport Association (IATA). AERA has requested written feedback from stakeholders by March 3.
The user development fee is imposed on passengers to generate revenue for airport enhancement and modernization. This fee is collected from departing passengers to address the viability gap in airport operations, and it is incorporated into the final ticket price, collected by airlines and subsequently remitted to the airport operator. The government has permitted the operators of both Delhi and Mumbai airports to impose UDF, mainly to support modernization initiatives.
Additionally, DIAL has proposed charging international business and first-class passengers double the user development fee compared to economy travelers over the next four financial years.
DIAL is also advocating for an increase in landing fees for narrow-body aircraft, like the Airbus A320, from Rs 188 to Rs 300 per metric ton, and for wide-body aircraft, such as the Boeing 777 and Airbus A350, from Rs 210 to Rs 430. It is anticipated that the rise in these charges will also be transferred to consumers by commercial airlines.
Airline officials believe that the proposed increases in UDF and aeronautical fees could dampen demand and impose financial strain on airlines, particularly during low-traffic periods like January-March and July-September, when discounts are necessary to attract travelers.
