India’s airport economic regulator has kept the User Development Fee (UDF) at Delhi’s IGI Airport unchanged for departing domestic passengers.
Accordingly, the Airports Economic Regulatory Authority of India (AERA) has maintained the existing rate of ₹129 per departing domestic passenger, which will remain constant throughout the fourth control period.
The fourth control period runs for five years, starting from April 1, 2024, to March 31, 2029.
“Keeping the interests of all stakeholders in mind, AERA, through its tariff determination exercise for Delhi airport, has prioritised the interest of domestic passengers by keeping the UDF unchanged at ₹129,” AERA Chairperson SKG Rahate told businessline.
“AERA’s tariff order will not impact the majority of passengers in India. Nearly 80 per cent of passengers are domestic in the country.”
Presently, AERA has been entrusted with the responsibility to determine tariffs that are charged to airlines and departing passengers during the ‘Control Period,’ which spans 5 years.
The tariffs are reviewed, scrutinised, and revised by AERA every five years, considering the investment and expenditure incurred by the airport operator.
Meanwhile, the UDF for international passengers has been rationalised, with a differential rate for economy and business class travellers.
‘User Pays’ principle
In its tariff determination order, AERA cited that this adjustment aligns with the “User Pays” principle and reflects the enhanced passenger experience and expanded facilities available and used by international travellers.
The variable tariff structure proposes variable fees based on travel class and time of departure or arrival.
Notably, the international economy class departing travellers will be charged ₹650, while business class departing passengers will face fees of ₹810.
“The landing and parking charges for the airlines have also been rationalised and kept at reasonable levels, considering competitive airport charges at similar airports,” the order read.
“This ensures that airline operations are not unduly burdened and that operational efficiency is maintained.”
Earlier, airport operator (DIAL) had proposed higher aeronautical and non-aeronautical charges through a variable fee structure to recover expenses borne to build additional infrastructure.
The DIAL manages and operates the IGI Airport under a public-private partnership (PPP) model.
According to AERA, the airport operator had proposed a 730 per cent increase in prevailing airport charges. However, after conducting a thorough analysis, AERA determined a “significantly lower” increase of 140 per cent over the existing airport charges.
“This adjustment will enable the airport operator to meet essential capital expenditure requirements, maintain operational efficiency, and ensure service quality in line with the standards outlined in the State Support Agreement (SSA) and the Operation, Management, and Development Agreement (OMDA),” the order read.
As per the order, the yield per passenger (YPP) of ₹432 per departing passenger for DIAL for the fourth control period was then suitably apportioned between landing & parking charges, UDF, and other airport charges along with their respective differential tariff structures.
“UDF now has been determined for both embarking and disembarking passenger as a significant portion of the airport infrastructure including aero bridges, travelators, conveyor belt, arrival facilities inside the terminal building are also being used by the disembarking passengers,” the order read.
“Therefore, distributing the overall UDF charges between embarking and disembarking passenger in a suitable proportion of their actual usage of airport facilities would lead to an equitable distribution of the tariff burden amongst the users of the airport and would also spread out the costs amongst all airport users.”