Higher ticket prices on Delhi routes? DIAL proposes airport tariff hike, domestic airfares to be up by 1.5-2%

A proposed tariff hike at Delhi’s Indira Gandhi International Airport (IGIA) is expected to raise domestic airfares by 1.5 to 2%, according to a top official. The Delhi International Airport Ltd (DIAL), which operates IGIA, has put forward a pricing model with different user fees based on travel class and peak or off-peak hours.

DIAL CEO Videh Kumar Jaipuriar said the Yield Per Passenger (YPP) will rise from ₹145 to ₹370 once the tariff revision is approved. YPP includes both airline and passenger charges, with the new structure shifting the balance toward passenger fees. Currently, 68% of YPP is attributed to airline charges and 32% to passenger charges. Under the new model, about 70% will come from passenger charges.

Jaipuriar noted that the impact on international fares will be less than 1%, while consultations are ongoing with the Airports Economic Regulatory Authority (AERA) for implementing the new tariffs from April 1, 2024, to March 31, 2029.

Delhi airport's current User Development Fee (UDF) is around ₹77 per passenger. Jaipuriar highlighted YPP comparisons with other major airports: ₹478 at Bangalore, ₹533 at Chennai, and ₹637 at Kolkata. Internationally, Heathrow charges ₹3,100, Schiphol ₹1,507, Hong Kong ₹946, and Paris ₹1,770, with figures varying based on exchange rates.

Infrastructure upgrades are also underway at IGIA, which handles 1,300 daily flights across three terminals. Terminal 2 will be closed for four to five months starting in April, and an Instrument Landing System (ILS) upgrade will enhance low-visibility landing capabilities. While T2 is shut, the renovated section of T1 will be operational, and part of T3 will be converted for international flights.

Since taking over IGIA in 2006, DIAL has invested ₹30,000 crore and contributed ₹25,000 crore in revenue-sharing payments to the Airports Authority of India (AAI), along with ₹192 crore in dividends. However, its accumulated loss stands at ₹2,900 crore as of December 2024.

The Association of Private Airport Operators (APAO) has supported DIAL’s proposed variable tariff model, calling it a globally recognized approach that balances affordability and financial sustainability. APAO also emphasized the benefits of class-based UDF, peak and off-peak pricing, and competitive landing and parking fees to ensure cost-effective airline operations.

(With PTI inputs)