At the heart of the dispute is how AERA (Airports Economic Regulatory Authority) calculated the Hypothetical Regulatory Asset Base (HRAB) and whether non-aeronautical assets like duty-free, parking and retail concessions should have been included when setting aeronautical tariffs for the first control period. TDSAT ruled that AERA’s earlier approach undervalued the asset base and that non-aeronautical assets ought to have been considered, producing a retrospective shortfall.
How Big Is the Impact?
Industry reporting indicates that domestic UDF at Delhi airport could jump from around ₹129 to roughly ₹1,261 and international UDF from about ₹650 to over ₹6,300 under a full pass-through while Mumbai figures show equally dramatic increases. Analysts warn such a one-time recovery would be passed on to passengers through higher ticket prices, landing charges, and other surcharges.
Legal Battle Moves to Supreme Court
The Airports Economic Regulatory Authority, domestic carriers and international airlines (including the likes of Lufthansa and Air France) have challenged or opposed the tribunal’s order and taken the matter to the Supreme Court. The Centre has signalled support for passengers in the litigation, underscoring policymakers’ concern that a sudden pass-through could throttle passenger demand and harm connectivity. Hearings are scheduled at the highest court in early December.
Passengers, Airlines and Policy Risks
Government officials told reporters that an overnight spike in airport levies would penalise travellers caught between a long legal dispute and the airports’ attempts to recover historical under-recoveries. Airlines argue they cannot absorb the entire increase, and may pass costs to consumers an outcome that could slow traffic growth and push leisure and low-fare travellers away.
Background: Privatisation, HRAB and a Decade-Long Dispute
The disagreement dates back to the first phase of airport privatisation (2006–09) when data on asset values transferred from AAI to private operators was incomplete. A 2006 concession framework used HRAB to set notional values, but interpretation differences between AERA and operators persisted. TDSAT’s July ruling reversed earlier positions and reopened the path to retrospective recoveries.
What Comes Next
The Supreme Court’s decisions will define whether airports may recover the disputed sums and, if so, over what timeframe and by what method. Policymakers and regulators face the challenge of balancing investor rights, regulatory consistency and passenger protection. For official regulatory background, see the Airports Economic Regulatory Authority (AERA) portal.