Massive Rs 50,000 Crore Airport Fee Dispute Reaches Supreme Court
The Central government has decided to support air passengers in a high-stakes legal battle that could potentially burden travelers with additional fees worth Rs 50,000 crore. The case, which has now reached the Supreme Court and is scheduled for hearing on December 3, pits airport operators against the Airports Economic Regulatory Authority of India (AERA).
What the Legal Battle is About
The dispute centers around the Hypothetical Regulatory Asset Base (HRAB) - the capital value of assets used to calculate costs of regulated services during the initial two years of private operation at Delhi and Mumbai airports. The airports were handed over to private players in early 2006 under the Public Private Partnership (PPP) model, with Delhi going to GMR Group and Mumbai to the then GVK Group.
Following a prolonged legal fight and a recent judgment by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), the operators of Delhi and Mumbai airports - DIAL and MIAL - have challenged the tribunal's order that struck down their massive Rs 50,000 crore HRAB claim.
Potential Impact on Air Travelers
Government officials have revealed alarming consequences if the private airport operators succeed in their claim. User Development Fee (UDF) paid directly by passengers could skyrocket - increasing by approximately nine times in Delhi and a staggering twenty-one times in Mumbai.
Specific estimates show that domestic UDF at Delhi airport could jump from Rs 129 to Rs 1,261, while at Mumbai airport, it could surge from Rs 175 to Rs 3,856. Additionally, airline landing and parking charges would also increase significantly, ultimately affecting airfares for all passengers.
Government's Stance and Broader Implications
The Aviation Ministry has taken a firm stand to back AERA in this crucial case. Officials emphasized that if the private operators win, the entire model of brownfield airport development could be jeopardized. The core issue involves whether non-aeronautical assets like hotels, malls, and other commercial developments should be included in the regulatory asset base.
Government sources argue that the airports were handed over with run-down terminals barely worth a few hundred crores in 2006, and adding the value of subsequent non-aero development would make the airport model excessively expensive for users. The dispute specifically covers the period between the airports' handover to private operators and when AERA began determining aeronautical tariffs in mid-2009.
With the Supreme Court hearing scheduled for December 3, the outcome of this case will determine whether Indian air travelers face one of the largest fee hikes in aviation history or if the current regulatory framework prevails to protect passenger interests.
