Rich People Problems? Why business class passengers may have to pay more at Delhi Airport

For business class travellers, the cost of luxury flying from Delhi Airport could soon with a heftier price tag.

As per a report by The Economic Times, Delhi International Airport Ltd (DIAL), which operates India’s busiest airport, has proposed a revised tariff structure that would introduce higher charges for passengers based on their class of travel and the time of departure.

While the move aims to balance airport revenues and ease congestion, it could make flying more expensive for those who prefer a little more luxury and convenience. If approved by the Airports Economic Regulatory Authority of India (AERA), these changes could significantly impact both passengers and airlines. Here’s what’s on the horizon.

A look at the proposed tariff changes

Under the proposed model, passengers flying in first class, business class, and premium economy will be required to pay a higher UDF compared to economy class passengers.

UDF or the User Development Fee is an amount charged by airport operators to recover costs associated with infrastructure upgrades.

Additionally, DIAL plans to increase landing and parking charges for airlines during peak hours, whereas those who operate outside the high-traffic periods will be subject to lower charges.

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Since Delhi Airport handles nearly 20 per cent of India’s total air traffic, this strategy aims to reduce congestion, encourage airlines to operate more flights during less busy periods and ensure a better distribution of air traffic throughout the day.

These proposals are currently under review by AERA, which determines airport tariffs every five years based on factors such as capital expenditure, operating costs, depreciation, non-aeronautical revenues, and taxation.

But why is Delhi airport charging more?

As per the report, DIAL has invested around Rs 12,900 crore in major upgrades at Delhi Airport. These include expanding Terminal 1, constructing a new runway, developing a 2.4-km elevated taxiway, and improving road infrastructure and passenger transfer facilities.

To recover these investments without significantly impacting price-sensitive economy-class travellers, the revised tariff model has been proposed for the five-year period up to FY29.

“The airport wants to spread out the charges so that the impact on a price-conscious economy passenger is lesser than someone who travels in business class. This will help to drive additional passengers as aircraft with premium configurations carry fewer passengers,” a person involved in the process told The Economic Times.

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Additionally, with congestion affecting operational efficiency at most airports, a peak-hour surcharge is expected to incentivise airlines to operate more flights during off-peak hours at comparatively lower fares.

“While the Delhi airport has significantly upgraded its infrastructure, there remains a saturation level beyond which capacity can’t be increased. This will allow better utilisation of resources as airlines will be able to give a cheaper fare beyond these hours,” the person added.

Another factor influencing these tariff changes could be competition from Noida International Airport, which is set to begin operations this summer. While Noida’s capacity will initially be low, Delhi airport is keen to optimise its resources and maintain its position as India’s aviation hub.

What will be the impact on business class travellers and airlines?

According to estimates made by analysts at investment bank Jefferies, Delhi Airport’s yield per passenger will rise significantly—from Rs 150 to Rs 450—due to the new pricing structure. While this may not heavily impact economy travellers, business class and first-class flyers could see an increase in ticket prices as airlines pass on the additional costs.

Industry experts believe that this differential pricing strategy will make air travel more affordable for economy passengers while ensuring better utilisation of airport resources during non-peak hours.

Currently, Delhi Airport handles approximately 73.7 million passengers annually, with a maximum capacity of 100 million. The new tariff adjustments aim to balance demand, infrastructure costs, and operational efficiency without discouraging air travel.

With input from agencies