Business · Companies · 8 hrs ago
GMR proposes higher, distance-based fees at Bhogapuram airport
GMR has proposed higher passenger fees at the new Bhogapuram airport in Andhra Pradesh, with charges varying by domestic journey length.
The plan sets different fees for trips up to or over 1,000 km and would raise some charges to more than double their first-year levels by FY31.
Airport fees, known as user development fees, are added to ticket prices and collected by airlines for airport operators.
GMR says the increases would help recover investment and financing costs, while experts warn they could make flying less affordable and reduce demand.
IndiGo has objected to the distance-based fees, saying higher airport charges could discourage travel in India’s price-sensitive market.
AERA must decide whether to approve the proposal; it regulates charges at major airports, and an interim order set flat fees at Bhogapuram.
GMR Airports has proposed higher user development fees at Bhogapuram airport, including different domestic charges based on journey distance.
The proposal is under review by the Airports Economic Regulatory Authority of India (AERA).
Domestic fees would vary for journeys of up to 1,000 kilometres and those beyond 1,000 kilometres.
IndiGo and travel experts say higher charges could make flying less affordable and reduce demand.
GMR says the proposed charges are needed to recover its investment and financing costs.
- Who
- GMR Airports has proposed the fees. IndiGo and travel experts have objected to higher charges.
- What
- The proposal would raise user development fees and set different domestic rates according to journey distance.
- When
- The proposal covers FY27 to FY31. IndiGo submitted its objection on 31 October.
- Where
- Bhogapuram airport in Andhra Pradesh.
- Why
- GMR says the charges are needed to recover investment and financing costs. Critics say higher fees could make flying less affordable and reduce demand.
GMR Airports
IndiGo and travel experts
Purpose of fees
GMR Airports
GMR says the proposed charges are needed to recover its investment and financing costs.
IndiGo and travel experts
IndiGo and travel experts argue that higher airport fees could make flying less affordable and reduce passenger demand.
Distance-based domestic charges
GMR Airports
GMR proposes different fees for journeys up to 1,000 kilometres and those beyond that distance.
IndiGo and travel experts
IndiGo asked AERA not to approve different user development fees based on distance.
IndiGo submitted an objection to AERA, asking it not to approve distance-based user development fees.
IndiGo chief executive Willie Walsh said airport charges were too high.
GMR responded to AERA about the proposal.
Mint reported that GMR's proposal was awaiting AERA approval.
- Airport
- Bhogapuram airport, Andhra Pradesh
- Domestic distance bands
- Up to 1,000 km; beyond 1,000 km
- FY27 domestic departure fees
- ₹1,000 for journeys up to 1,000 km; ₹1,230 for longer journeys
- FY31 domestic departure fees
- ₹2,090 for journeys up to 1,000 km; ₹2,460 for longer journeys
- Proposal period
- FY27 to FY31
- Regulator
- Airports Economic Regulatory Authority of India (AERA)
1 source
What people are saying
Passengers are already burdened by high airfares. Such proposals make flying less attractive. If allowed, private airports will soon start determining UDF based on body weight.
We would request AERA not to consider the airport operator's proposal to have different UDF rates based on distance.
Airport charges are too high and so this market would do much better if we had lower taxes.
effective monopolies