Domestic passengers flying in and out of Delhi Airport may soon face hikes in fares during peak hours (5-8:55 am and pm), according to a Times of India report. Additionally, international first and business-class passengers might be charged more than those travelling in economy or premium economy, marking a first for an Indian airport.
Delhi International Airport Ltd. (DIAL) has proposed the introduction of a user development fee (UDF) for arriving passengers, which is currently applicable only for departures. DIAL is also considering tiered charges based on flight times and class of travel. According to the sources quoted by ToI, these measures aim to prevent a sharp, across-the-board increase while supporting the airport’s ambitious expansion plans.
DIAL, which operates IGI Airport, has submitted a proposed tariff structure for aeronautical charges to the Airport Economic Regulatory Authority (AERA). AERA will carry out a thorough review and consultation process before finalising the rates. These charges, which include landing, parking fees, and UDF, impact airlines' fare decisions and are paid directly by passengers to the airport operator.
For now, a UDF of around Rs 52 (excluding taxes) is only applied to departing passengers. However, DIAL has proposed raising the fee to Rs 610 and Rs 1,620 (excluding taxes) depending on flight timings, with other aeronautical charges also seeing potential hikes.
Among the notable capital projects completed at IGI Airport are the expansion of Terminal 1 (T1), the construction of an elevated taxiway, and infrastructure upgrades. The next phase will involve the long-awaited air train connecting terminals and Aerocity. In the future, Terminal 2 (T2) will be demolished to make space for a larger Terminal 4 (T4).
“DIAL has been incurring losses in the past. For the current financial year, losses are expected to exceed Rs 1,500 crore. The recently completed Phase 3A expansion project involved a massive capital expenditure exceeding Rs 12,500 crore, a significant portion of which was funded by borrowings. As of Dec 2024, DIAL is carrying a substantial debt of over Rs 15,000 crore, including $522 million in bonds maturing in Oct 2026," DIAL stated in its letter to AERA along with the proposed tariff card.
DIAL explained that it would not generate enough revenue to meet its obligations and would need to take out new loans to cover the bond maturity in 2026. With projected revenues over the next four years, the average aeronautical revenue per passenger is expected to reach Rs 370. As a result, DIAL anticipates losses over the next two financial years, which could negatively impact its credit rating and complicate future borrowing for debt repayment.
To address these challenges and ensure its financial sustainability, DIAL has requested AERA to approve an aeronautical revenue per passenger of Rs 450 for FY 2025-26 and the same amount for 2026-27, with the remaining amount to be allocated in the subsequent two years. DIAL has urged AERA to consider this request when finalising the tariff structure, with the new rates set to take effect from April 1, 2025.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
