For the first time in India, Delhi’s Indira Gandhi International (IGI) Airport may implement a variable tariff structure, charging business class and peak-hour travelers higher fees. The proposal, submitted by the GMR Group-owned airport to the Airport Economic Regulatory Authority (AERA), aims to recover infrastructure upgrade costs while managing congestion during peak travel hours.
Proposed UDF Changes
The proposed User Development Fee (UDF) structure, expected to take effect from April 2025, will see international business class passengers paying ₹570 per journey, twice the amount charged to economy and premium economy travelers, who will pay ₹280. Domestic passengers flying during peak hours will also be subject to higher charges compared to those traveling during off-peak times.
Delhi Airport has defined peak-hour windows as:
- Morning: 5:00 AM – 8:55 AM
- Evening: 5:00 PM – 8:55 PM
Rationale Behind the Increased Charges
Airport operators levy UDF to recover expenses from infrastructure enhancements. Delhi Airport has invested approximately ₹12,900 crore in various upgrades, including:
- Expansion of Terminal 1
- A new 2.4 km elevated taxiway
- Improved road infrastructure
- Enhanced passenger transfer facilities
To prevent an across-the-board fare hike that disproportionately affects budget-conscious travelers, the airport’s new model shifts the financial burden to premium travelers who typically have a higher capacity to absorb increased costs.
Impact on Airlines and Travelers
Higher charges during peak hours are expected to encourage airlines to schedule more flights during non-peak periods, easing congestion and improving operational efficiency. By spreading out passenger traffic, the airport aims to optimize resources and reduce delays.
Final Approval and Implementation
The proposal is awaiting approval from AERA, which determines airport charges based on operating costs, depreciation, non-aero revenues, and taxation. If approved, this pricing model could set a precedent for other airports in India, reshaping the future of air travel pricing across the country.
