The Airport Economic Regulatory Authority (AERA) has proposed a new tariff rule intended to reduce charges for passengers at Rajiv Gandhi International Airport (RGIA) in Hyderabad. The proposal focuses on the methodology used to calculate the Universal Development Fee (UDF), which is levied on flyers at several Indian airports. AERA has framed the rule as part of a broader review of tariff norms and airport charging practices. The move follows earlier regulatory reviews of airport tariff principles undertaken in recent years.

The draft seeks to clarify the categorisation of revenue streams and the allocation of costs between aeronautical and non-aeronautical activities, with the stated aim of ensuring a fairer recovery of airport charges. The change is intended to affect how levies such as the UDF are set while preserving the overall structure of tariff frameworks. Stakeholders are asked to consider the technical definitions and accounting treatment that underpin charge calculations. Regulatory clarifications are aimed at improving transparency in charge setting and reducing disputes over cost allocation.

AERA has opened a consultation process that invites submissions from airlines, airport operators and other stakeholders on the technical and financial aspects of the rule. The regulator will review comments and subsequently revise the draft where justified and necessary. Industry participants are expected to examine operational impacts, passenger welfare considerations and investment recovery implications in their responses. Responses will inform the regulator's assessment of whether the draft achieves its policy objectives.

If adopted, the rule would lead to revised tariff orders that lower per passenger levies at RGIA and similar airports, altering the distribution of charges without changing fundamental financing arrangements. The regulator described the exercise as an effort to balance user charges with the financial sustainability of airport infrastructure. Further details and timelines will be published by the authority as the consultation proceeds. Market participants and consumer groups will monitor the outcome for implications on travel affordability and airport service funding.