By Dominic Welling
The Supreme Court of India has ruled that the two private companies operating Delhi and Mumbai airports are not allowed to charge an Airport Development Fee (ADF) on passengers.
The court ruled that only the Airports Authority of India (AAI) has the lawful right to levy a fee payable in advance of an airport construction, and not private companies.
At the moment, GMR group, which heads Delhi International Airport Ltd (DIAL) and GVK Group, which heads Mumbai International Airport Ltd (MIAL), both charge Airport Development Fees on their passengers.
DIAL charges an ADF of $4.50 on domestic passengers, and $30 on international passengers, while MIAL charges $2.25 and $13.50 respectively.
These fees will no longer exist following the ruling, however passengers will still have to pay a User Development Fee (UDF) where applicable.
A UDF is levied after an airport has been constructed and is based on the total paid project costs and incomes. They are currently charged at Bangalore and Hyderabad airports.
Since the project at Delhi Airport is nearly completed, DIAL should be able to move from charging an ADF to a UDF quite rapidly, however the project at Mumbai is not expected to be completed until 2012.
