Private sector airport operators have sought urgent policy and regulatory support from the Centre following the recent reduction in landing and parking charges for domestic flights at major airports.

In a communication sent to the Ministry of Civil Aviation, the Airport Operators Association of India (APAO) cited concerns over cash flows, debt servicing, and operational sustainability.

Accordingly, the association said it supports the Airports Economic Regulatory Authority (AERA) order reducing landing and parking charges by 25 per cent for domestic flights for three months.

As per the order, any under-recovery in the Aggregate Revenue Requirement (ARR) for airport operators will be adjusted in the next control period.

However, APAO said the temporary tariff reduction could affect airport operators’ near-term revenues, particularly at airports with higher international traffic.

The association noted that airports are facing traffic reductions, revenue losses, cost escalation, and operational risks amid evolving geopolitical conditions.

Besides, airport operators also face losses in non-aeronautical revenue streams, which, according to the association, cannot be recovered subsequently.

Furthermore, APAO said the revenue impact on the aviation sector extends beyond airlines and affects airport operators as well.

The association further stated that the tariff reduction was introduced without consultation with airport operators, raising concerns around regulatory certainty in the airport sector.

According to APAO, a predictable regulatory framework has been developed over the past 16 years through the Ministry of Civil Aviation and AERA.

It added that abrupt tariff revisions may affect investor confidence, particularly as the government continues efforts to privatise more Airports Authority of India (AAI) airports and promote private participation in greenfield airport development.

Meanwhile, APAO proposed a differentiated, airport-specific approach aligned with traffic mix and operational realities.

The association cited that airport operators remain contractually obligated to pay revenue share or per-passenger fees to the Airports Authority of India under concession agreements.

In the absence of interim relief on such outgoings, APAO said the burden of the tariff reduction falls disproportionately on airport operators.

The association said that airports continue to maintain infrastructure, safety standards, service quality benchmarks, and operational readiness, resulting in largely fixed expenditure.

While acknowledging the future true-up provision under the tariff framework, APAO said the mismatch between current revenue losses and deferred recovery creates immediate liquidity pressure.

The association requested the Centre to consider temporary deferment of revenue share and per-passenger fee payments to the Airports Authority of India for an amount equivalent to the reduction in landing and parking charges.

APAO proposed that such deferment should not be treated as a default under concession agreements and should not attract penalties or interest.

The association also recommended an upward revision in landing and parking charges after the relief period to recover under-recoveries through the Aggregate Revenue Requirement framework.

Additionally, APAO suggested that losses arising from reduced landing and parking charges could be partly offset through an increase in User Development Fee for international passengers during the same period.

The association further stated that reduced airport charges may not necessarily translate into lower airfares, as airlines operate in a largely market-driven pricing environment.

Nevertheless, airport operators, the association said bear the immediate financial burden of tariff reductions, while the intended consumer benefit may not be fully realised.

The association pointed out that Aviation Turbine Fuel (ATF) constitutes a larger share of airline operating costs compared to landing and parking charges.

In addition, APAO suggested that the Centre may request state governments levying Value Added Tax (VAT) above 5 per cent on ATF to reduce rates to 5 per cent or below.

Published on May 1, 2026