Photo: Mint
Photo: Mint

GMR files writ petition against scrapping UDF at Hyderabad airport

The company has named the Union of India, government of Andhra Pradesh and the Aera as respondents in the case

A GMR group unit has challenged the airport regulator’s order scrapping the user development fee (UDF) at Rajiv Gandhi International Airport in Hyderabad by filing a writ petition in the Andhra Pradesh high court, arguing that the move would impair its operational performance.

GMR Hyderabad International Airport (P) Ltd, in its petition, has named the Union of India, government of Andhra Pradesh and the Airports Economic Regulatory Authority of India (Aera) as respondents in the case.

On 24 February, Aera scrapped UDF at Hyderabad airport with effect from 1 April until 31 March 2016.

The high court will hear GMR’s petition on 25 March, said a person close the development, who didn’t want to be named. GMR group executives declined comment because the matter is “sub judice". Aera did not comment on the matter.

“If the order is implemented with effect from 1 April 2014, the petitioner will suffer significant cash deficit which will create an irreparable impact on its operational performance and debt servicing ability," said the petition, a copy of which has been seen by Mint.

The writ petition requested the high court to pass an interim order overturning Aera’s move.

Domestic passengers departing from the Hyderabad airport now pay a UDF of 430 plus taxes (effectively 484 per passenger) and international passengers have to pay 1,700 plus taxes ( 1,910). UDF is a charge levied by airports on passengers to recoup the investment on infrastructure development.

A senior airline consultant, requesting anonymity, said it was strange that GMR had not opted to challenge this decision before the appellate authority.

“But in this case, the ministry of civil aviation will have to defend Aera as it has cleared the regulator’s order scrapping UDF. If Aera loses, the passengers will have to pay UDF," he said.

Last week, Sidharath Kapur, chief financial officer (airports) at GMR group, said the group was looking at all options. He said on the sidelines of India Aviation 2014 conference in Hyderabad hosted by the ministry of civil aviation that the Aera order will adversely affect Hyderabad airport, which has been making a profit for the last three years.