Picture credits: Delhi Airport X
New Delhi: Delhi International Airport Ltd (DIAL), the operator of Indira Gandhi International Airport (IGIA), has proposed a significant increase in the User Development Fee (UDF) for certain categories of passengers. The move aims to recover infrastructure investment costs and manage peak-hour congestion.
Proposed UDF Hike
Under the new proposal, the UDF for departing domestic passengers could rise from the current ₹52 to ₹610, while international travelers may see a hike of up to ₹1,620, depending on the time of travel and ticket class. The proposed charges would be higher during peak hours—between 5:00 AM and 8:55 AM, and 5:00 PM and 8:55 PM—and would also apply to international business and first-class travelers.
Additionally, for the first time, DIAL has suggested introducing a UDF for arriving passengers, set at half the rate of departing passengers. If implemented, this would mean that both inbound and outbound travelers will have to pay a fee, adding to the overall cost of air travel through IGIA.
Picture credits: Delhi Airport X
DIAL CEO Videh Kumar Jaipuriar stated that the proposed 140% tariff hike over the 2006 base rate would result in an estimated increase of 1.5-2% in domestic airfares and 0.5-1% in international fares.
DIAL has expanded IGIA’s capacity from 1.2 crore passengers in 2006 to nearly 11 crore today, investing ₹30,000 crore while sharing ₹25,000 crore in revenue with AAI, Jaipuriar told TOI.
Despite AAI benefiting by ₹55,000 crore, DIAL has accumulated losses of ₹2,900 crore since 2006. Jaipuriar warned that without a tariff hike, the company’s ₹2,500 crore equity may be eroded by the fiscal year-end, impacting credit ratings and borrowing costs.
Airlines’ Opposition to UDF Hike
Airlines have previously opposed increases in UDF, arguing that it raises overall travel costs and affects passenger demand. The International Air Transport Association (IATA) and other airline groups have warned that higher airport charges could make IGIA a less attractive hub for both domestic and international carriers.
Picture credits: X (gogiinc)
In the past, airlines have urged regulators to keep UDF rates competitive, citing concerns over increased operational costs and the potential for higher ticket prices deterring travelers.
Infrastructure Upgrades
DIAL has justified the proposed fee increase by citing ongoing and completed infrastructure projects worth ₹12,500 crore. These include the expansion of Terminal 1 to accommodate a larger passenger volume, the construction of a fourth runway to improve air traffic management, and the development of an elevated taxiway to reduce aircraft turnaround time and congestion on runways.
Regulatory Approval Pending
The proposal is currently under review by the Airports Economic Regulatory Authority (AERA). If approved, the new UDF structure could significantly impact both passenger costs and airline operations at IGIA. Passengers flying during peak hours and those traveling in premium classes would be most affected, while airlines may have to adjust pricing strategies to accommodate the increased fees.
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