Mumbai Airport User Fees Hike: Passengers to Pay More, Airlines Get Relief

Mumbai, Mar 18 (PTI) Flying from Mumbai International Airport is set to become costlier from next financial year with the private airport operator MIAL proposing a steep hike of Rs 463 in User Development Fee for international passengers, while domestic passengers will be charged a UDF of Rs 325.

At present, international passengers pay a User Development Fee (UDF) of Rs 187, which has been proposed to be raised to Rs 650, while domestic passengers do not pay any such fee.

"The proposed tariff card, which has been submitted to the Airport Economic Regulatory Authority (AERA) for its approval, is in line with what the regulator has approved for MIAL," a source told PTI.

At the same time, however, in a big relief to airlines, MIAL has also proposed a 35 per cent reduction in the landing and parking charges at its facility for the fourth control period (FY2024-2029), according to the AERA website.

AERA has the mandate to determine all tariffs for major airports in the country. An airport which has or is designated to have a capacity of 3.5-million passengers per annum or above falls in the category of major airports.

A joint venture company Mumbai International Airport Ltd (MIAL) operates and manages Mumbai International Airport, the country's second-busiest airport. Adani Group owns a 74 per cent stake in MIAL while the Airports Authority of India has the remaining 26 per cent stake.

"Mumbai's Chhatrapati Shivaji Maharaj International Airport (CSMIA) is an ageing infrastructure which needs modernisation both in terms of physical, which we are investing in to make it a world-class infrastructure, where also we are doing a lot of investment in passenger convenience like self-baggage drop, digital yatra, e-gate, facial recognition, upgrading the lounges and also sustainability part," a source said.

Mumbai International Airport, with two terminals -- T1 and T2 -- has a capacity to handle 55 million passengers per annum. In the fiscal year ended March 2024, it handled a total of 52.82 million passengers.

MIAL in June 2024 had submitted the multi-year tariff plan to the AERA proposing a 675 per cent hike in user fee from October 1, 2024, citing a target revenue of Rs 38,724.90 crore and a capex of Rs 17,439.38 crore for the five-period for carrying out expansion work, which included reconstruction of terminal 1 as well as expansion of T2 and general terminal.

AERA, however, in January approved a capex of Rs 7,832 crore and determined target revenue at Rs 7,602.94 crore and allowed it an 18.8 per cent hike in fee from April 1, 2025.

The regulator has called for a stakeholders' meeting in New Delhi on March 25, to elicit their views before taking a final call on MIAL's tariff proposal.

MIAL in a statement said that the proposed fee is to enable MIAL to undertake infrastructure development and technological enhancement projects at Mumbai airport.

Stating that it has sought to strike a balance between infrastructure enhancement and sustain world-class airport operations by levying UDF and reducing the landing and parking charges by more than one-third, the airport operator said that this reduction is expected to positively impact airfares from Mumbai, enabling airlines to manage costs more efficiently and maintain competitive ticket prices.

The current Yield Per Passenger (YPP) at Mumbai Airport stands at Rs 285 adding that the proposal submitted to AERA aims to revise the YPP to approximately Rs 332, representing an 18 per cent increase, in line with the Consultation Paper issued by AERA on 10 March 2025.

Over the next five years, the airport will invest Rs 10,000 crore in creation of airport infrastructure and recover a total revenue of Rs 7,600 crore from an expected 229 million passengers, which translates to a balanced approach in revenue recovery, it said.

The new tariff structure proposes to strategically shift the revenue mix, with an increase in UDF while reducing landing and parking charges by 35 per cent. This proposal aligns with the tariff structures of other major airports in India and will enhance revenue stability as well as improve the overall passenger experience, ensuring that CSMIA remains a competitive and attractive aviation hub for travellers, MIAL said.

MIAL has been committed to consistently improving passenger convenience, operational efficiency, and the long-term sustainability of one of India's landmark aviation hubs, the airport operator said.

Key initiatives include the Domestic-to-Domestic Transfer Facility at T2, the new Taxiway Z to improve on-time performance and support sustainable airport operations introduction of eGates to manage congestion at entry to the terminal, free inter-terminal coach transfers, and FASTag-enabled parking, among other passenger-centric advancements, it stated.

The proposed changes will accelerate its ambitious infrastructure enhancement programme that will further transform the airport and its facilities to make them ready for future air travel demands, MIAL said.