AERA Cuts User Development Fee For Domestic, Int'l Passengers At Hyderabad Airport

Regulator AERA has reduced the user development fee for departing domestic and international passengers at Hyderabad airport to ₹515 and ₹1,030, respectively, effective September 1.

The tariff order for the period 2026-2031, effective from September 1 this year till March 31, 2031, has been decided on the basis of the incremental Aggregate Revenue Requirement (ARR) framework, the regulator said in a release on Tuesday.

Under the framework, the Airports Economic Regulatory Authority (AERA) has linked the cost recovery through airport charges with the actual date of completion, commissioning and putting to use of a few identified high-value capex projects that have been planned for commissioning by the airport operator in the latter half of the five-year tariff cycle.

"The User Development Fee (UDF) for departing domestic passengers has been fixed at a reasonable level of ₹515 per passenger, which is lower than the UDF of ₹580 per passenger proposed by the airport operator, and is also lower than the existing UDF being levied at the airport of ₹750.

"Similarly, the UDF for departing international passengers has been fixed at ₹1,030 per passenger, as against ₹1,150 proposed by the Airport Operator and the existing UDF ₹1,500," AERA said in the release.

Also, the landing charges have been rationalised to ₹435 per MT (Metric Tonnes) for domestic flights and ₹630 per MT for international flights for the period.

Rajiv Gandhi International Airport in Hyderabad is operated by GMR Hyderabad International Airport Limited (GHIAL).

Besides, AERA has allowed a variable tariff plan (VTP), structured as a landing-charge incentive mechanism with benefits provided upon satisfaction of prescribed qualifying conditions, for the Hyderabad airport.

"AERA is of the view that the VTP provides an appropriate level of support for traffic development and route expansion while ensuring that aeronautical tariffs remain cost-reflective, transparent and non-discriminatory in accordance with ICAO principles, and do not impose an undue burden on airport users.

"This would provide requisite incentives to airlines to expand their network and ramp up traffic at the airport," the release said.

After detailed examination, AERA has considered a baseline ARR of ₹11,683.49 crore (₹9,308.20 crore in present value terms) against ₹27,851 crore (₹20,025 crore in present value terms) sought by GHIAL for the fourth control period (2026-2031).

"This translates into a baseline yield per passenger (YPP) of ₹426.39, which has been suitably apportioned between landing & parking charges, UDF and other airport charges," the release said.

Earlier this week, AERA steeply slashed the UDF for passengers at Bengaluru International Airport to ₹300 for domestic and ₹997 for international passengers for the five-year control period till March 2031.

The revised rates will be applicable from September 1.

In the case of Bengaluru airport also, the regulator pursued the incremental ARR framework.