Private Airports Urge Higher User Development Fees Amid Operational Risks
Facing operational risk and charge higher UDF, say private airports
Business Standard
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Private airports in India are facing significant revenue losses and operational risks due to reduced landing and parking charges and rising fuel costs. The Association of Private Airport Operators is calling for an increase in user development fees for international passengers to offset these losses and ensure financial stability.
- 01Private airports report revenue losses and operational risks due to reduced charges.
- 02The Association of Private Airport Operators is advocating for increased user development fees.
- 03There are concerns over the uniform reduction in charges impacting different airports unevenly.
- 04Non-aeronautical income streams are facing permanent losses, compounding financial stress.
- 05The association warns that reduced charges may not benefit consumers if airlines do not lower fares.
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The Association of Private Airport Operators (APAO) in India has expressed serious concerns regarding the financial stability of private airports, particularly those heavily reliant on international traffic. Following the government's decision on April 8, 2026, to reduce landing and parking charges by 25% for domestic flights, APAO reported that operational risks and revenue losses have escalated due to rising fuel prices linked to geopolitical tensions since February 28. In response, the association is advocating for an increase in the user development fee (UDF) for international passengers to help offset these losses. APAO also requested a deferment of revenue shares and per-passenger fees owed to the Airports Authority of India (AAI) during this relief period without penalties. They emphasized that while aeronautical charges can be adjusted later, non-aeronautical income from retail and other services is suffering permanent losses. The association criticized the blanket reduction in charges, arguing it fails to consider the varying traffic mixes at different airports, leading to financial imbalances. Furthermore, APAO urged state governments to lower the value-added tax on aviation turbine fuel to 5% or less, as fuel costs significantly impact airline expenses. The association cautioned that without mechanisms ensuring airlines pass on savings from reduced airport charges to passengers, the intended benefits may not reach consumers, leaving airport operators to shoulder the financial burden.
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The financial strain on private airports could lead to higher costs for airlines, potentially resulting in increased ticket prices for travelers if operational costs are not mitigated.
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