Premium, Business-Class Passengers To Pay More At Delhi Airport Under New Tariff Proposal

Premium, Business-Class Passengers To Pay More At Delhi Airport Under New Tariff Proposal

Delhi's Indira Gandhi International Airport is set to undergo a change in its tariff structure that will impact premium passengers flying business class and economy. According to sources, the airport is planning to introduce a new User Development Fee (UDF) model proposed for five years up to FY29.

The revised model aims to recover the increased costs of upgrading infrastructure at the airport, including the completion of terminal one expansion, construction of a new runway, and improvements in roads and transfer facilities. The Delhi airport has already invested over Rs 12,900 crore in upgrading these facilities which is expected to impact airline operations significantly.

A recent report suggests that if the proposal goes through, airline operators in premium cabins will have to pay more for landing and parking fees, while those flying during off-peak hours may be able to save money. This shift aims to reduce congestion at the airport by encouraging airlines to operate additional flights during less busy times of the day.

On the other hand, the new tariff structure seeks to minimize the impact on economy class passengers who are generally more price sensitive and could face a lesser burden compared to those traveling in premium cabins. Financial analysts have predicted that this shift may increase the yield per passenger at Delhi airport from around Rs 150 now to Rs 450 by FY29.

In light of rising competition from an additional Noida airport, plans to optimize resources are becoming more pressing for airports like the Indira Gandhi International Airport which continues to be a major hub in India's aviation sector. The revised tariff structure remains under review at present and its final implications continue to unfold as implementation progresses.