India’s top two airlines, IndiGo and Air India, are resisting proposals by the country’s newest airports to raise passenger charges, warning that higher tariffs could make flying more expensive and further slow traffic growth at a time when domestic demand is already weakening due to elevated jet fuel prices.
Adani-owned Navi Mumbai International Airport Ltd (NMIAL), which started operations in December, currently levies a user development fee (UDF) of ₹620 on domestic departures and ₹270 on arrivals, which will remain unchanged in FY27. These charges are already significantly higher than prevailing UDF levels at several airports in India.
It has proposed to raise the fee by 20% in FY28 and by 10% annually through FY30 - resulting in a total increase of about 45% over FY26 levels. A similar increase has been proposed for international passenger charges.
Noida International Airport (NIA), which is expected to begin operations on 15 June, has proposed domestic departure user development fee of ₹653 in FY27, rising by about 41% by FY31. International departure charges are set to rise by roughly 45% over the same period, while arrival charges could increase by about 40%. Overall, the proposed annual increases range from 7% to 17% across domestic and international passengers, for both departures and arrivals.
The user development fee is a mandatory charge levied by airports to fund the expansion and modernisation of infrastructure, such as new terminals and runways. It is included in the airfare and collected by airlines on behalf of airport operators.
The two airlines, in their submissions to the Airports Economic Regulatory Authority (AERA), argued that tariffs must remain sustainable, warning that a steep increase in UDF could push up airfares and dampen demand. Mint has reviewed the submissions.
The proposed tariffs by the new airports are substantially higher than those levied at several existing airports.
Delhi airport’s current domestic departure UDF for economy fares is ₹129, which is about a fifth of the charge proposed at Navi Mumbai and Noida. Mumbai’s Chhatrapati Shivaji Maharaj International Airport, also operated by Adani, charges a domestic departure fee of ₹175. Bengaluru’s domestic departure fee is ₹550, while Kolkata airport has a tariff of ₹547.
The ad-hoc departure UDF that NMIAL can charge is ₹620, while Noida airport can charge ₹490, minister of state for civil aviation Murlidhar Mohol said in response to a question in the Rajya Sabha on 9 February. The ad-hoc levy is a temporary UDF that airports are allowed to charge passengers until the regulator finalises the rates.
The Airports Economic Regulatory Authority (AERA), the regulatory body that determines airport tariffs, is reviewing the tariffs proposed by the two greenfield airports for their first five years. For airport operators, UDF, aircraft parking charges and landing fees are among the key revenue streams used to recover capital costs incurred during airport construction.
Impact on fares
Since UDF is built into ticket prices, airlines argue that the proposed hikes could directly affect fares and weaken demand. Discussions and consultations between airport operators, airlines and other stakeholders, including the regulatory authority, have been underway since April.
The proposed charges could dampen passenger traffic, especially when airlines are grappling with geopolitical tensions, elevated jet fuel prices and rising operating costs, Air India said in its submission to AERA, which Mint reviewed. The Tata-owned airline said carriers would prioritize “higher yield routes rather than expanding destinations,” warranting a reassessment of Noida airport's traffic projections and tariff assumptions.
IndiGo, the country’s largest carrier, said tariffs need to remain sustainable, noting that some proposed charges at Navi Mumbai are higher than those at Mumbai and NIA at Jewar.
“We suggest that the escalations in the first control period should not exceed 10% each year to promote growth from the airport,” IndiGo said in a submission to AERA in response to Navi Mumbai airport's proposed charges. The submission was reviewed by Mint. Control period refers to a five-year term during which the AERA determines tariffs at airports.
Navi Mumbai airport expects passenger traffic of 19.31 million in FY27, while Noida airport expects about 9 million passengers. Comparatively, New Delhi airport handled 78.70 million passengers in FY26, Mumbai airport 55.3 million and Bengaluru 44.47 million passengers.
The new airports defended the proposed tariffs, arguing that early users must share part of the cost of developing new aviation infrastructure. NMIAL said airlines and passengers could not be “completely insulated” from the costs associated with the initial ramp-up of the ₹17,920 crore greenfield airport.
“Early users benefit from fully available infrastructure and therefore cannot be completely insulated from the transitional cost dynamics associated with initial ramp-up,” the airport said in its submission to AERA.
Short-term pain
Noida airport, which built its first phase at ₹11,200 crore, said geopolitical tensions and high fuel prices may affect traffic growth in the short term.
“...it is submitted that while the points highlighted may have some bearing on traffic ramp-up in the short term, they do not materially alter the long-term traffic prospects of the airport over the five-year period,” NIA said in its 16 April submission to AERA.
India’s domestic air passenger traffic growth slowed to 1.3% in FY26 from 7% a year earlier, underscoring airline concerns over rising costs and softer demand.
“Tariffs at NIA are in line with those at comparable greenfield and brownfield airports in the country. Our tariff model is designed to spread recovery over a longer horizon, which keeps costs sustainable,” an NIA spokesperson told Mint.
“Navi Mumbai International Airport is a new greenfield airport with significant upfront capital investment. The tariff structure reflects these initial costs, and it is aligned with regulatory tariff norms applicable to similar airports in India. Additionally, we have proposed leveling the charges between Mumbai and Navi Mumbai Airport in our submissions to the regulator,” an NMIAL spokesperson said in response to queries from Mint.
Air India and IndiGo did not respond to Mint's queries. AERA is yet to announce the final tariff rates for the two airports.
“New airports need to attract airlines and passengers, both. So, lower user development fees and other benefits like free landing charges need to be extended in the initial period by airport operators,” said Gurmukh Singh Bawa, secretary general of the Air Travellers' Association. “Passengers benefit if user fees are lower. Airlines are expected to pass on lower user fees through lower ticket prices.”
Bawa noted that the consultation process is underway at AERA, and that the final rates could be different from what the operators have proposed.
“Domestic air passengers are already hit by higher air fares, including levy of fuel surcharge. So, burdening them further at this moment with high user fees by new airports, even though they have incurred a significant capex, is a bit unfair,” Bawa added.