Airfares to drop sharply as govt enforces Delhi tariff
FARE RELIEF Passengers likely to pay reduced fares while travelling out of Delhi
Airfares are set to drop along with aircraft landing and parking fees in a potential boon to both passengers and airlines.
Aviation regulator Directorate General of Civil Aviation (DGCA), in an order on Friday, slashed the user development fee for passengers on both domestic and international flights originating in Delhi with immediate effect.
Passengers will be charged only ₹10 as a user development fee (UDF) for domestic flights like Delhi-Mumbai, from as much as ₹578 previously.
For a Delhi-New York international flight, this will drop from as much as ₹1,335 per ticket to ₹45, the DGCA said in its order, which was reviewed by Mint.
Until now, both departing and arriving passengers had to pay the UDF. Now, only those departing from Delhi airport will have to pay the fee.
Airlines will save on aircraft landing and parking fees, which are being nearly halved.
A Delhi-Mumbai flight for the next fortnight is currently selling for a base price of ₹2,100. This could be cut to ₹1,600 if the airlines pass on the benefits to consumers.
“This is a welcome move that will benefit passengers flying out of Delhi,” said Ajay Singh, chairman and managing director of SpiceJet.
Air India, Jet Airways, IndiGo, Vistara, and GoAir did not respond to emails seeking a comment.
“It is a big relief, fares will fall,” said an airline executive, who did not wish to be named.
The new tariffs have been pending implementation for a few years, because the Delhi airport operator had gone to the courts against proposed tariff revisions.
Air India challenged this in the Supreme Court, which on July 3 vacated a stay granted by the Delhi high court, allowing the revised tariffs to kick in.
GMR Infrastructure Ltd-led Delhi Delhi International Airport Limited (DIAL) told the Bombay Stock Exchange on Friday that it will pursue the matter with an appellate tribunal.
The Supreme Court, it said, “has also directed the appellate tribunal to decide the tariff appeals filed by DIAL expeditiously, preferably within two months from the date of the order of the Hon’ble Supreme Court. DIAL will engage constructively with the regulator to endeavour a balanced implenesses mentation and will work expeditiously with the appellate tribunal to reach a fair and positive outcome in the two months directed by the Hon’ble Supreme Court.”
Delhi airport earns about ₹350 crore every month from these airport charges currently.
An analyst welcomed the move to lower the UDF, which has been imposed to allow airport operators to recover their investments.
“Its a good thing if someone is saying ‘let’s get on with it’. Let the consumers benefit. Otherwise, what happens is that a passenger of today is paying for a passenger of tomorrow for no reason, just because the airport operator wants a better cash flow and keeps fighting for better ones,” said Amrit Pandurangi, former head of the infrastructure practice at Deloitte Touche Tohmatsu India Llp.
Consumer body Air Passengers Association of India (APAI) said all the money already collected by Delhi airport because of delayed implementation of the new tariff should be returned to passengers as well as airlines immediately.
“This is a very good move,” said APAI chief Sudhakar Reddy. “APAI wants removal of ADF (airport development fee) and substantial reduction in UDF and landing, parking charges as recommended by AERA and refund of all amounts collected illegally by DIAL.”