Marginal increase in airfare after tariff hike: Delhi Airport CEO

Airfares for domestic flights from Delhi Airport may see an increase of around 2% increase in domestic airfares for passengers after the airport implements the new charges.

Videh Kumar Jaipuriar, CEO of Delhi International Airport Limited (DIAL) - the company which operates the airport said that the tariff hike became necessary to recover the investment it has done to upgrade infrastructure at the airport.

DIAL has invested around Rs 12,900 crore to expand Terminal 1, building a new runway, a 2.4 km elevated taxiway, besides upgrading road infrastructure and transfer facilities.


The airport’s yield per passenger, which is the average revenue it earns per passenger, will increase from Rs 120 to Rs 340 if the regulator Airport Economic Regulatory Authority (AERA) allows the proposed hike.

AERA fixes revenue targets for airports every five years based on parameters such as operating costs, depreciation, non-aero revenues and taxes, and fixes charges through which an airport operator raises revenue.

Jaipuriar said that despite the increase, the yield per passenger of the airport will be lesser than Indian airprots like Bengaluru, Chennai and Kolkata and major global airports like London Heathrow, Changi (Singapore) and Charles De Gaulle (Paris).

“We have not shied away from investments and in improving passenger experience,” Jaipuriar said.

“Since taking over the airport in 2006, DIAL has invested Rs 30,000 crore, and Rs 25,000 crore has been given as part of revenue sharing to the Airports Authority of India (AAI). A dividend of Rs 192 crore has been given during this period.”

The airport has proposed to charge passengers based on their class and time of travel. If approved by the government, this will be the first time an airport in the country will have such a variable tariff structure.

Domestic fliers travelling during peak hours are likely to be charged a higher landing and aircraft parking fee, while those operating beyond these hours will pay a lower charge. Delhi Airport has defined two windows of peak hours—5-8:55 AM and 5-8:55 PM.

"65% of passengers are either visiting friends or family and normally they don't have to take an early morning 8:00 flight to catch the office. So most of the travellers during peak hours are travelling for business, the ticket cost of which is often paid by their employers. So, we have charged higher charges for them and subsidized people who will travel beyond non-peak hours,” Jaipuriar said.

The airport also intends to waive off landing charges for new destinations farther than 5,000 kms to attract international air traffic, mostly flights to Europe, North America and Australia. “This will encourage more direct flights helping to transform Delhi into a major global hub,” Jaipuriar said.

The airport is also working on upgrading the facilities at the airport, which has three terminals — T1, T2 and T3 — and handles around 1,300 flights daily.

T2 will be shut down for four to five months starting likely from April and the Instrument Landing System (ILS) at one of the runways will be upgraded to make it capable for flight landings during low visibility conditions.