Airfares at Delhi and Mumbai Airports Could Rise as GMR, Adani Win Tariff Battle
The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has ruled in favor of GMR and Adani, allowing them to include non-aeronautical revenues in the tariff determination model. This could lead to a 6% increase in airport charges over the next decade.
AirfaresAirport TariffsGmrAdaniTdsatReal Estate MumbaiJul 12, 2025
GMR and Adani, which operate Delhi and Mumbai airports respectively, had been challenging AERA’s exclusion of non-aero revenues from the HRAB for nearly a decade. The legal battle came to an end after the Supreme Court directed the tribunal to reassess the HRAB based on a 2011 letter from the Ministry of Civil Aviation that supported a single-till revenue model, combining both aeronautical and non-aeronautical income.
Kotak Institutional Equities noted that the ruling could cost airlines like IndiGo up to 3.4% of their annual revenue, given the rise in airport charges. IndiGo posted Rs 80,803 crore in revenue for the fiscal year 2025. For GMR, the fiscal year 2025 saw a 19% rise in revenue to Rs 10,414 crore, with narrowing losses. Adani Airports, a subsidiary of Adani Enterprises, recorded a 27% increase in revenue to Rs 10,224 crore, with pre-tax losses reduced to Rs 5 crore.
The ruling also opens the door to recovering historic losses, estimated at Rs 17,500 crore for Delhi Airport, through future HRAB revisions via a “true-up” mechanism, according to a senior airport official. However, the TDSAT’s decision did not allow for retrospective recovery of these losses.
While the TDSAT’s decision has canceled the previous tariff orders for the period 2009-2014, analysts predict that this ruling could prompt a broader reassessment of tariff models across other private airports in India. This could lead to a more consistent approach to how airport charges are determined and potentially impact airfares across the country.
As GMR and Adani prepare to strengthen their revenues, passengers and airlines may need to brace for gradually rising costs over the next decade. The impact of this decision on the aviation industry and the traveling public will be closely monitored in the coming months and years.
Frequently Asked Questions
What is the Hypothetical Regulatory Asset Base (HRAB)?
The Hypothetical Regulatory Asset Base (HRAB) is a model used to determine airport tariffs. It includes the assets and revenues considered when setting the charges for using airport facilities.
Why did GMR and Adani challenge AERA’s methodology?
GMR and Adani challenged AERA’s methodology because AERA excluded non-aeronautical revenues, such as retail, parking, and advertising, from the HRAB, which they believed should be included to accurately reflect their operational costs.
How much could airport charges increase due to the TDSAT ruling?
The TDSAT ruling is expected to raise airport charges by around 6% over the next ten years.
What is the impact of the ruling on airlines like IndiGo?
The ruling could cost airlines like IndiGo up to 3.4% of their annual revenue due to the increase in airport charges.
Will the ruling affect other private airports in India?
Yes, the ruling could prompt a broader reassessment of tariff models across other private airports in India, potentially leading to changes in how airport charges are determined.
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