The IATA is of the view that it could affect passenger demand in the airport in the initial years of operations.
In its response, NMIAL has written to the Airports Economic Regulatory Authority (Aera), stating that the airport charges at the new airport were only 4-5 per cent of the overall cost of operations of the airlines and that analysis had been supported even by the IATA .
“Accordingly the assertion (by the IATA) that tariff levels materially constrain demand or route development is economically overstated,” NMIAL added.
NMIAL was responding to arguments of other stakeholders in respect of the Aera consultation paper of March 17, 2026, in the matter of determining aeronautical tariffs in NMIAL for the first control period between April 1, 2025, and March 31, 2030.
The IATA has argued that aeronautical charges, including the UDF, in early years of operations should be moderated to reflect the limited traffic base and the role of NMIAL as a secondary airport during the rampup stage.
It has argued that high charges that have a bearing on passengers can dampen demand and slow the development of the airport’s catchment.
The airport, however, said the aeronautical tariffs at NMIAL were determined not on the basis of accelerated cost recovery but through the authority’s (Aera’s) prescribed methodological approach.
It said tariffs in early years reflected “a controlled allocation of cost recovery aligned with a prudent ramp up of tariff, rather than disproportionate front loading of charges on early users”.
Any artificial reduction, it said, in tariffs would not eliminate costs but would defer recovery, resulting in sharper increases in subsequent control periods.
It also said it had designed the tariff structure keeping in mind the interests of airport users. It has proposed tariffs for FY27 at the same level as the ad hoc rates cleared FY26.
This, it said, has been done to avoid any sudden tariff shock to airport users during the initial years of airport operations.
The Lufthansa group has complained that against the initial completion date of December 2021, the deadline was revised to December 2025, and international operations were supposed to start on April 1, 2026, (which did not happen). So there has been a delay of four years and the users cannot be penalised for the cost inefficiency and mismanagement on the part of the operator to meet its deadlines.
NMIAL, however, said Lufthansa’s position was incorrect and showed a lack of understanding of issues. The concession agreement expressly provides for revising timelines beyond the control of the operator as happened during the pandemic.
The project encountered many challenges, such as land development complexities, pandemic-related disruption, delay in environmental clearances, and statutory approvals, it said.
The airport has pointed out that the argument that airlines should not bear the financing cost ignores the fact that infrastructure investment is done ahead of demand and it requires compensation to ensure viability.
IATA: High aeronautical charges in the initial years would slow the demand and impact the airport’s growth; needs to be moderated
NMIAL: Airport charges only 4-5% of airlines operation cost, won't impact demand and growth
NMIAL: Artificial reduction in early year tariffs won’t eliminate costs but would defer recovery, forcing sharper increases in subsequent periods
 "Navi Mumbai International Airport, NMIAL")