India’s Airports Economic Regulatory Authority (AERA) has clarified that the tariff structure for the upcoming Noida International Airport has been determined on the basis of the proposal submitted by the airport developer as well as the economics of operating a greenfield airport with high upfront investments and low initial passenger traffic.
Accordingly, the clarification comes amid concerns raised by airlines and industry executives after fares from the upcoming airport were found to be nearly identical to those from Indira Gandhi International Airport despite Uttar Pradesh offering significantly lower Aviation Turbine Fuel (ATF) taxation.
Airport Comparisons
Speaking to businessline, AERA Chairperson SKG Rahate said comparisons between Delhi airport and Noida International Airport from an airport charges perspective are misplaced given the structural differences between the two airports.
“Comparison of User Development Fee (UDF) and aeronautical charges between Delhi Airport and Noida Airport is misplaced from airport economics point of view, as Delhi is a brownfield, depreciated asset with high passenger traffic whereas Jewar is a newly opened greenfield airport with new assets built by putting large investments upfront and with initial low passenger traffic volume,” Rahate said.
According to AERA, the tariff structure for the airport was worked out on the basis of investments made for constructing the airport and the admissible returns under airport tariff guidelines to ensure viable operations.
Collective Decision
AERA further said it undertook a comprehensive tariff determination exercise based on the ‘Multi-Year Tariff Proposal’ submitted by the airport operator and held stakeholder consultations involving airlines, passenger associations, industry bodies, and other airport operators.
Following regulatory scrutiny and prudence checks, AERA said it significantly rationalised the ‘Aggregate Revenue Requirement’ proposed by the airport operator.
Notably, against the airport operator’s proposal of around ₹6,800 crore for the 1st control period( 5 year tariff cycle) , AERA said it has allowed around ₹5,300 crore after moderating various cost elements.
Furthermore, the regulator said a sizeable portion of the airport’s revenue recovery has been deferred to the next tariff cycle in order to moderate tariff burden during the initial years of operations.
Deferred Tarrifs
As a result, AERA fixed the User Development Fee for departing domestic passengers at ₹490 against the ₹653 proposed by the airport operator.
Similarly, the domestic landing charge was fixed at ₹725 per tonne compared to the proposed ₹760 per tonne by the airport operator.
“The UDF allowed by AERA is comparable with the national average of UDF at major airports and is also well within the range of UDF currently levied at non-major airports,” the regulator said.
Presently, air fares from Noida International Airport and Delhi airport are nearly identical on several announced domestic routes despite Uttar Pradesh levying only 1 per cent Value Added Tax (VAT) on ATF compared to nearly 25 per cent in Delhi.
Listed Fares
A businessline check of fares available on online travel agency Ixigo showed no meaningful difference between fares from the two airports on announced routes.
The fares on the Jewar–Lucknow and Delhi–Lucknow sectors were identical at ₹3,394, while Jewar–Hyderabad and Delhi–Hyderabad flights were both priced at ₹6,129. Similarly, fares to Amritsar from both airports were also identical.
The lower fuel tax structure in Uttar Pradesh was expected to provide airlines operating from Noida International Airport with a cost advantage over Delhi airport operations.
However, airline executives told businessline that higher aeronautical charges and User Development Fees at the airport are offsetting gains arising from lower fuel taxation.
Passenger Impact
Nonetheless, industry insiders aware of the tariff structure said these charges account for only around 6 per cent of the overall operating cost, whereas airlines are deriving significant benefits from the lower VAT on ATF.
Meanwhile, IndiGo, which has commenced bookings from the airport ahead of commercial operations beginning June 15, had also raised concerns over the tariff structure during stakeholder consultations with the regulator.
In its submissions to AERA, the airline said landing charges for narrow-body aircraft at the airport are significantly higher compared to Delhi airport for domestic operations.
Industry executives also said the elevated airport charges may affect the airport’s ability to attract passengers during the initial phase of operations, particularly given Delhi airport’s stronger connectivity, metro access, and established network presence.
Nevertheless, AERA maintained that airport charges at Jewar and Delhi cannot be kept at par due to differences in investment structure, traffic profile, and airport maturity.
On its part, airport operator Yamuna International Airport Private Limited has maintained that the tariff structure is aligned with comparable greenfield airports and necessary for long-term infrastructure recovery of a new greenfield airport to ensure it’s viable operation.
Published on May 11, 2026