Govt Mulls Tightening Grip Over Airport Operators to Maintain Service Standard; Here’s Why

Government is considering to link airport tariffs charged by operators to service standards maintained by them. The Airports Economic Regulatory Authority of India’s (AERA) proposed move aims to keep a check on operators to avoid lapses in services, including delays in baggage delivery, long check-in or security queues, and unclean toilets, the Economic Times reported. This comes around a time when complaints regarding poor service standards at the airports have increased significantly. 

“Performance standards will be linked to airport tariffs through a balanced framework that incorporates both rebates for non-compliance and incentives for exceeding benchmarks,” ET reported, citing a government consultation paper. 

AERA is set to hold a stakeholders’ consultation meeting next week, and the date for submitting comments on the proposal is September 24, 2025.

Indian airports are operated mainly by the Airports Authority of India (AAI), Adani Airports Holding (AAHL) and GMR Airports Infrastructure. 

The proposed changes are crucial, particularly because airport services operators function in a near-monopoly kind of market and customers have limited choice. Hence, it becomes pertinent for the government to hold operators accountable for the kind of services delivered by them and ensure customer satisfaction. The move will also help in maintaining service quality standards across all major airports in the country. 

“Airport services are characterised by natural monopoly or limited competition, wherein users have limited options on service providers. In such an environment, the role of the regulator extends beyond tariff determination to ensuring that services are delivered efficiently, transparently, and to a standard that meets both operational and user expectations,” the Times of India reported, citing the paper. 

To monitor that operators maintain a strict standard of services, the government has planned to appoint a third-party agency to audit compliance at these airports, including metro hubs, PPP-operated facilities, those run by AAI, and the upcoming Navi Mumbai and Noida airports. 

The AERA currently fixes airport charges for five years depending on capital expenditure by the operator. The charges are calculated based on the airport’s revenue and expenditure on parameters like operating costs, depreciation, and non-aero revenue while determining tariffs.