New Delhi: The GMR-run Hyderabad airport has proposed a 23% reduction in departure fees. At the same time, it plans to charge arriving passengers for the first time, according to a letter reviewed by Mint.
This change aims to keep total passenger revenue largely unchanged while supporting a ₹13,975-crore expansion of the airport. Under the proposal submitted to the Airports Economic Regulatory Authority of India (Aera), domestic departure fees, which form a part of the user development fee (UDF) levied on passengers by airports, would drop to ₹580, and international departure fees would fall to ₹1,150.
These proposed reductions would be effective from 1 September 2026 to 31 March 2030. Currently, arriving passengers pay no fees, but under the proposal, they would start to incur charges of ₹170 for domestic flights and ₹350 for international flights during the same period. As a result, total fees per passenger would remain at ₹750 for domestic and ₹1,500 for international arrivals, roughly where they are now.
The airport operator, GMR Hyderabad International Airport Ltd (Ghial), aims to reach an annual passenger capacity of 47 million by FY31, up from the current 34 million. Ghial has indicated that the southern terminal will be overwhelmed by 2030 without new infrastructure. The proposed capital expenditure includes a new terminal, runway, taxiways, and aircraft parking bays in the airport's northern area.
This proposal comes as Hyderabad recovers from a 9% year-on-year drop in traffic in May, linked to disruptions caused by the war in West Asia. It also contrasts with Bengaluru airport, which has requested an 18% reduction in passenger charges while pursuing its own expansion, but has sought an option to revise tariffs mid-term when capacity additions are commercialised.
Capacity concerns drive urgency
“We are planning to spend around ₹13,975 crore over 3-4 years to develop a new terminal and a new runway,” K. Narayana Rao, authorised signatory on behalf of Hyderabad airport, wrote in a 26 June letter to Suyash Narain, secretary at the airports tariff regulator, Airports Economic Regulatory Authority of India (Aera).
The logic is further justified by the Hyderabad airport operator, who explains that such a charge is already “approved by the Authority” (Aera in this case). “We have proposed to reduce UDF in the fifth year…” it added. Mint has seen a copy of the letter.
Stakeholder discussions on the proposal are expected to begin next week.
A report in Parliament, presented in February this year, shows that UDF at Hyderabad airport has been increasing since FY21. From ₹281, it has moved up to ₹750 in FY25, for domestic departures, witnessing four revisions in five years.
The airport operator has also proposed an additional variable tariff plan. Under that, it will provide discounts to airlines as they launch new routes from the airport and develop the airport as a hub for southern India.
GMR Airports is yet to respond to queries from Mint.
The proposed capital expenditure programme for the fourth control period (FY27-FY31) is around ₹12,275 crore, earmarked for expansion works, and around ₹1,700 crore for general capital expenditure.
The proposal comes as Hyderabad airport prepares for its next phase of expansion amid expectations of rising passenger traffic.
Among India's costliest airports
To accommodate that growth, the airport plans to develop its northern precinct, including a new passenger terminal, a new runway, aircraft parking bays, taxiways, roads, utilities and associated infrastructure. "The traffic forecast indicates that the estimated handling capacity of the current development at the southern terminal...will be surpassed by 2030," the airport said in its submission.
It added that even after the ongoing enhancement works, the existing terminal would not adequately meet future airside requirements, necessitating the development of the northern precinct.
User development fees is an India-specific terminology, and is factored into ticket prices of airlines. Globally there are different names such as passenger service charges, airport service charges, passenger facility charges and so on. Generally, charges are only on departures. But, there is no standard one size fits all rule, because no passenger is paying it upfront at a counter. It is a part of their ticket price.
Hyderabad airport currently levies one of the country's highest UDFs, charging ₹750 for departing domestic passengers, while arrivals are not charged. Among GMR-run airports, only the upcoming Bhogapuram and the operational Goa airports have higher passenger charges of ₹835 and ₹840, respectively.
By comparison, Delhi and Mumbai airports levy substantially lower domestic departure UDFs, although international charges vary by class of travel.
In FY26, Hyderabad airport handled 30.5 million passengers, up 3% from a year ago. According to the company's investor presentation, it reported revenue of ₹2,476.2 crore and a profit after tax of ₹426.9 crore. The airport is operated by GMR Hyderabad International Airport Ltd (Ghial), with GMR Airports owning 74%, the Telangana government 13%, and the Airports Authority of India 13%.
"GMR Hyderabad International Airport is seeking Aera approval for a ₹14,000 crore expansion (debt:equity of 75:25) to be classified as aeronautical capex, which would enable recovery through user charges and landing fees over the control period to support infrastructure growth," said Niraj Rathi, senior director–Ratings, Brickwork Ratings.
"While this would lead to an elevated leverage profile for the company in the near term, its debt protection metrics remain comfortable," he added.
- Hyderabad airport cuts departure fees by 23% and adds a new arrival passenger charge.
- Total passenger revenue stays flat despite the fee restructuring between arrivals and departures.
- Plan funds ₹13,975-crore expansion targeting 47 million annual passengers by FY31.
- Real fee reduction only begins FY31, once traffic and revenue peak.
- Bengaluru airport cuts fees 18% despite expansion, unlike Hyderabad's revenue-neutral approach.