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Delhi, Mumbai flyers may face higher charges as GMR, Adani win tariff case
However, this change could make flying in and out of India's two busiest airports more expensive for both airlines and passengers.
Airfares likely to rise
The news report, citing analysts at Kotak Institutional Equities, said that airport charges at Delhi and Mumbai airports could increase by about 6 per cent over the next ten years. For airlines like IndiGo, this could mean a cost impact equal to 3.4 per cent of their annual revenue. In FY25, IndiGo posted revenues of ₹80,803 crore.
The heart of the issue lies in the method used to calculate the Hypothetical Regulatory Asset Base (HRAB), which determines how much airports can earn. In India, airports often operate as monopolies in their cities. To ensure fair pricing, the Airport Economic Regulatory Authority (AERA) sets a cap on earnings.
Until now, AERA excluded non-aeronautical income — such as revenue from shops, ads, and parking — when calculating HRAB. Only aeronautical charges like landing fees and passenger service fees were considered.
A long-standing dispute
Delhi and Mumbai airports, privatised in 2006, challenged this method in 2012-13. They argued that both types of revenues should be counted, in line with the original single-till revenue model used before privatisation. After more than a decade of legal battle, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has now ruled in their favour, the news report said.
A key turning point came when the Supreme Court referred to a 2011 letter from the Ministry of Civil Aviation, which confirmed that the single-till approach was intended for Delhi and Mumbai. The apex court then asked TDSAT to reassess HRAB by including non-aeronautical revenue.
In its 1 July judgment, TDSAT cancelled the airport regulator's earlier tariff decision for 2009-2014 and criticised the regulator for ignoring the civil aviation ministry's directive. However, the tribunal did not make any ruling about recovering lost revenue from the past.
The news report quoted an airport executive as saying that the lost revenue, estimated at ₹17,500 crore for Delhi alone, might be factored into future HRAB calculations through a 'true-up' mechanism.
Market impact and future outlook
Following the judgment, Kotak Institutional Equities raised its fair value estimate for GMR Airports to ₹96 per share, Mint reported. GMR shares rose around 5 per cent between July 1 and July 11, even as the Nifty50 index fell by 1.5 per cent. Adani Airports, which is unlisted, is housed under Adani Enterprises.
GMR's FY25 revenue rose 19 per cent to ₹10,414 crore, with losses narrowing slightly. Adani Airports saw a 27 per cent rise in revenue to ₹10,224 crore and reduced its pre-tax loss to ₹5 crore.
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