AERA Cuts Hyderabad Airport User Development Fee to Rs 515 for Domestic Flights

The Airports Economic Regulatory Authority (AERA) has reduced the User Development Fee (UDF) for passengers flying out of Rajiv Gandhi International Airport in Hyderabad, fixing charges for domestic departures at Rs 515 and international departures at Rs 1,030, effective September 1.

The revised tariff order covers the five-year control period from September 1 this year until March 31, 2031. The new rates significantly reduce the current fees levied at the airport, where departing domestic passengers pay an existing UDF of Rs 750 and international passengers pay Rs 1,500.

The airport operator, GMR Hyderabad International Airport Limited (GHIAL), had proposed a domestic UDF of Rs 580 and an international UDF of Rs 1,150. AERA set the fees below both the existing charges and the operator's proposals based on an incremental Aggregate Revenue Requirement (ARR) framework.

Under the framework, AERA linked cost recovery through airport charges to the actual completion, commissioning, and operational rollout of identified high-value capital expenditure projects scheduled by GHIAL in the second half of the tariff cycle.

After examining the airport's proposal, AERA approved a baseline ARR of Rs 11,683.49 crore (Rs 9,308.20 crore in present value terms) for the 2026-2031 period, compared to the Rs 27,851 crore (Rs 20,025 crore in present value terms) requested by GHIAL. This established a baseline yield per passenger of Rs 426.39, apportioned across landing and parking charges, UDF, and other airport fees.

Aircraft landing charges at the airport were also rationalised to Rs 435 per metric tonne for domestic flights and Rs 630 per metric tonne for international flights.

Additionally, AERA permitted a Variable Tariff Plan (VTP) as a landing-charge incentive mechanism for airlines meeting prescribed qualifying conditions. The regulator stated that the VTP is intended to support traffic growth and route expansion while ensuring tariffs remain cost-reflective, transparent, and non-discriminatory.