AERA allows GMR Hyderabad to increase user development fee from Apr 1, 2022

Flying from Hyderabad airport to get costlier from April 1, 2022

The Airports Economic Regulatory Authority has allowed GMR Hyderabad International Airport that manages Rajiv Gandhi International Airport here to gradually increase User Development Fee on embarking domestic as well as international passengers from April 1, 2022.

In an order on the tariff revision for the third control period (April 2021 to March 26) based on a proposal by the GHIAL, the AERA has issued orders which were recently uploaded in its website.

As per the orders of the regulator, the airport operator was allowed to increase UDF from the existing Rs 281 to Rs 480 and Rs 393 to Rs 700 for domestic and international passengers respectively from April 1, 2022.

Similarly, the charges will be enhanced up to Rs 750 for domestic and Rs 1500 for international passengers by December 31, 2025. However, the charges will be reduced to Rs 500 and Rs 1,000 for domestic and international passengers for the last three months of the Control period, AERA said in its order.

"The Authority has agreed for tariff increases and additional charges in the form of UDF, but at the same time it believes that the subsequent control period would be better in the context of lesser capital requirements and larger passenger base owing to the recovery in aviation sector and revival of the economy from the COVID-19 pandemic," AERA said.

The tariff rates for the subsequent control period are expected to be lower. In view of this, the Authority has reduced the tariff rates in the last quarter of the final year of the Third Control Period, FY 2026, which may also continue till tariff determination for the Fourth Control Period, it further said.

The airport sought an increase of UDF from Rs 281 to a whopping Rs 608 from October 1, a jump of 116 per cent for departing domestic passengers. Similarly, the airport operator sought a 231 per cent hike on international passengers to Rs 1,300 from the current Rs 393.

The GHIAL, during the third control period proposed to gradually increase the UDF up to Rs 728 and Rs 2,200 by the end of 2025-26 for domestic and international passengers respectively.

The Authority decided to not allow the capital expenditure of Rs 519 crore towards metro connectivity during the Third Control Period due to lack of more and specific details.

The GMR group earlier said it will be investing over Rs 500 crore in a Rs 5,000 crore metro rail link project being proposed by the Telangana government for connectivity to the aerodrome from various parts of the city.