Govt Cuts Airport Fees By 25% For Three Months To Help Airlines

The Ministry of Civil Aviation, on 9th April, announced that it will cut aircraft landing and parking charges by 25% for domestic flights for the next three months.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

Relief Measures For Airlines

According to the Ministry of Civil Aviation, the reduction will be implemented with immediate effect across all major airports regulated by the Airports Economic Regulatory Authority of India (AERA) as well as non-major airports operated by the Airports Authority of India (AAI). The move is expected to help airlines save around ₹400 crore during the three-month period.

The ministry stated that any revenue shortfall faced by airport operators due to the temporary cut will be adjusted in future tariff cycles. AERA typically sets tariffs, including landing and parking charges, for a five-year control period.

Cost Pressures On Aviation Sector

The decision comes amid increased cost pressures on airlines due to higher aviation turbine fuel (ATF) prices, rupee depreciation, and operational challenges linked to the West Asia conflict. These factors have raised expenses related to fuel, aircraft leasing, and maintenance, all of which are largely denominated in U.S. dollars.

Closure of sections of Gulf airspace is also contributing to longer routes that will, in turn, lead to increased fuel usage.

Fuel Surcharge and Pricing Trend

Over the last couple of weeks, airlines have introduced surcharges to account for the increased cost of ATF. IndiGo and Air India started charging for fuel starting mid-March, whereas Akasa Air introduced surcharges of ₹199 to ₹1,300 on March 15.

Afterwards, airlines adjusted their surcharge rates in April, where IndiGo followed a tiered structure based on the flight distance from April 2, whereas Air India changed its surcharge grid from April 8.

The government had earlier allowed a partial increase of up to 25% in domestic ATF prices around April 1 to contain airfare spikes, while international pricing remained market-linked.

Objective Of The Policy Move

According to the Civil Aviation Ministry, this decrease in airport charges is aimed at assisting the airline industry and helping curb the increase in fares of air travelers. This move has been implemented in light of the challenges that have emerged in managing the increasing operational costs in the aviation industry.

Implementation of this policy in both major and non-major airports helps ensure uniformity in this move. This temporary decrease in airport charges is projected to help airlines cope with their increasing operational costs without affecting service delivery.