MIAL seeks user levy on domestic flyers, and 3.5x hike for int'l travel

To balance the impact of the increased UDF, Adani Group-led MIAL said it has also proposed a reduction of approximately 35 per cent in aircraft landing and parking charges

Mumbai International Airport Ltd (MIAL), which operates the airport in the country’s financial capital, has proposed introducing a “user development fee” (UDF) of ₹325 it charges every departing domestic passenger, and increasing the UDF for international passengers to ₹650, more than three times the present rate.

 

As a balancing measure, MIAL, run by the Adani group, said it had proposed reducing aircraft landing and parking charges by about 35 per cent.

 

The tariff proposal, submitted to the Airport Economic Regulatory Authority (AERA), aims to fund infrastructure and technological enhancement at the airport.

 

The AERA will soon take a final decision on the tariffs airlines and passengers would pay MIAL in the fourth control period — between 2024-25 and 2028-29. “The new tariff structure proposes to strategically shift the revenue mix, with an increase in the UDF while reducing landing and parking charges. This will ensure that Mumbai airport remains a competitive and attractive aviation hub for travellers,” the airport operator added.

 

At present, there is no UDF on domestic passengers but for each international passenger it is ₹187.

 

MIAL said the 35 per cent reduction in landing and parking charges was expected to bring down airfares for flights from Mumbai. 

 

The operator stated the yield per passenger (YPP) at Mumbai airport stood at ₹285 and it should now be increased to ₹332, which is in line with the AERA’s consultation paper issued on March 10. The YPP is calculated by dividing passenger-related revenue by the number of passengers. The increase in YPP is primarily driven by the revised UDF structure.

 

The airport has two terminals — T1 and T2. T1 comprises three buildings: T1A, T1B, and T1C.

 

T1 is scheduled to be demolished in November this year. It is “necessary” to ensure public safety, the AERA stated in its March 10 paper after a site visit and an audit by the Indian Institute of Technology Bombay, which found corrosion, seepage, and cracks in the terminal.

 

T1 and T2 have an annual passenger-handling capacity of 15 million and 40 million passengers.

 

MIAL stated the reconstruction of T1 was expected to be done by September 2028. During the reconstruction phase, about 5 million passengers of T1 would be shifted to T2, while the remaining 10 million passengers would be shifted to Navi Mumbai airport.

 

Navi Mumbai airport, being built by MIAL’s subsidiary, is expected to start commercial flights in June.

 

In 2023-24, Mumbai airport handled 52.8 million passengers and it is expected to come up with the same figure in 2024-25, MIAL stated.

 

MIAL is planning to invest ₹10,000 crore over the next five years in infrastructure development.

 

The operator anticipates recovering ₹7,600 crore in revenue from an estimated 229 million passengers in the fourth control period. The proposed tariff structure aligns with those of other major airports in India and aims to enhance revenue stability while improving passenger experience at the Mumbai airport, MIAL noted.

 

Delhi International Airport Ltd (DIAL), run by the GMR group, is talking to the AERA on aeronautical tariffs, which can be charged during the fourth control period. It has proposed charging an increased UDF based on the time of travel and the class of the passenger.

 

At present, all departing domestic and international passengers pay a flat ₹129 as UDF at Delhi airport.

 

In its proposal to the AERA, DIAL has proposed that business and first-class passengers pay ₹1,620 in 2025-26 and 2026-27, and ₹860 in 2027-28 and 2028-29.

 

For departing international economy and premium economy travellers, the proposed UDF is ₹810 in 2025-26 and 2026-27, and down to ₹430 in 2027-28 and 2028-29.

 

DIAL has proposed domestic passengers flying during peak hours pay ₹610 in 2025-26 and 2026-27, and ₹315 in 2027-28 and 2028-29.

 

For non-peak hours, the proposed UDF is ₹405 in 2025-26 and 2026-27, and down to ₹210 in 2027-28 and 2028-29.