Why Delhi, Mumbai Flyers May Face a Steep User Fee Hike, and the Legal Dispute Behind It

A decade-long dispute between the Airports Economic Regulatory Authority (AERA) and the Delhi and Mumbai airport operators is threatening to sharply increase user fees for travellers at these airports. The case, now expected to be heard in the Supreme Court from December 3, could lead to the user development fee (UDF) rising by as much as 22 times.

The matter centres on the Hypothetical Regulatory Asset Base (HRAB), which AERA uses to estimate airport asset values. These valuations are then used to set aeronautical tariffs, including landing fees and passenger charges.

In a July 2025 ruling, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) struck down earlier HRAB calculations and ordered fresh ones. According to AERA, this ruling imposes a financial burden of more than ₹50,000 crore on airport charges.

To recover this, reports suggest Delhi and Mumbai airports may need to sharply increase UDFs for domestic and international passengers. At Delhi airport, the UDF for domestic passengers could rise from ₹129 to ₹1,261, almost a 900% jump. At Mumbai airport, the charge may go up from ₹175 to ₹3,856, an increase of more than 2,100%.

For international passengers, the fee at Delhi could rise to ₹6,356 from the current ₹650, while at Mumbai it could increase to ₹13,495 from ₹615.

How the Dispute Started

The issue relates to the period from April 1, 2009 to March 31, 2014, the first “control period” for the private operators of the Delhi and Mumbai airports.

Privatised in 2006, both airports signed an Operation, Management and Development Agreement with the Airports Authority of India (AAI), as well as a State Support Agreement (SSA) with the Government of India. Because these airports were privatised before AERA existed, the SSA served as the guiding framework for tariff setting.

In 2011, the operators, MIAL (Mumbai), controlled by the Adani Group, and DIAL (Delhi), controlled by the GMR Group, submitted their multi-year tariff proposals (MYTPs). AERA issued a consultation paper in October 2012 and later released tariff orders. These MYTPs calculated HRAB using Schedule I of the SSA, which meant using the “single-till” approach that includes both aeronautical and non-aeronautical revenue.

AERA disagreed with this approach and rejected the operators’ HRAB calculations.

MIAL and DIAL challenged the tariff orders before TDSAT, but their appeals were dismissed in 2018. They later approached the Supreme Court in 2023, which sent the matter back to TDSAT with specific directions. The Supreme Court asked TDSAT to interpret Schedule I of the SSA, examine the Civil Aviation Ministry’s (MoCA) role in tariff setting during the first control period, and decide whether the single-till model should apply.

What TDSAT Order Said

In its July ruling, TDSAT held that AERA should have calculated HRAB by working the tariff formula backwards and should have used the single-till approach. It said AERA ignored a clear May 2011 directive from MoCA instructing it to back-solve the formula using actual revenue, costs and taxes.

TDSAT also noted that since AERA began regulating only from April 2009 and MoCA still controlled tariff setting during part of that period, MoCA had the authority to determine how HRAB should be computed.

The tribunal further said the single-till system was appropriate because the airports were under AAI and MoCA at the time, the SSA was created in a single-till framework, and the SSA itself did not mandate any alternative method.

As a result, TDSAT ordered a fresh HRAB calculation within 12 weeks, which may allow operators to recover historical revenue gaps. However, this could also lead to increased charges for both airlines and passengers. In response, AERA, domestic airlines and foreign carriers such as Lufthansa, Air France and Gulf Air have approached the courts. The matter is listed before Justices Aravind Kumar and Nilay Vipinchandra Anjaria on Wednesday.

According to a Hindu BusinessLine report, the government, through MoCA, has decided to support AERA, a stance that may help avoid steep increases in passenger user fees.