Air passengers hoping for cheaper flights from the newly developed Noida International Airport (NIM) may be disappointed. Despite Uttar Pradesh levying only 1 percent VAT on aviation turbine fuel (ATF) compared to Delhi's 25 percent at Indira Gandhi International (IGI) Airport, ticket prices from NIM are projected to be similar to, and in some cases even higher than, those from IGI.
High Airport Charges Drive Up Costs
The primary reason for this unexpected pricing parity lies in significantly higher airport charges at the Noida facility. IndiGo, the first airline to announce routes from NIM, has observed nearly identical fares for flights to destinations like Bengaluru, Hyderabad, Jammu, and Amritsar from both airports. This has prompted the airline to formally oppose the proposed tariff structure before the Airports Economic Regulatory Authority (AERA).
IndiGo argues that the current pricing model could deter travelers from choosing Noida airport, thereby undermining its potential as an alternative aviation hub for the National Capital Region.
Comparing User Development and Landing Fees
The disparity in airport charges is substantial:
- User Development Fee (UDF) for Domestic Departures: Noida proposes Rs 653, while Delhi charges Rs 129.
- UDF for Domestic Arrivals: Noida proposes Rs 282, compared to Delhi's Rs 56.
- UDF for International Departures: Noida plans Rs 1,200, against Delhi's Rs 650.
- UDF for International Arrivals: Noida proposes Rs 520, while Delhi charges Rs 275.
Aircraft operators also face steeper costs. Landing charges for larger aircraft, such as an Airbus A321, are more than double at Noida airport for domestic operations (Rs 760 per metric tonne) compared to Delhi (Rs 347). For international operations, Noida proposes Rs 870 per metric tonne versus Delhi's Rs 570.
Airline Concerns and Political Opposition
IndiGo estimates that a single domestic round trip using an Airbus A321 could cost nearly Rs 1.88 lakh more at Noida airport. Operating around 15 daily round-trip flights from NIM could lead to additional annual costs of approximately Rs 103 crore for the airline. IndiGo's submission to AERA warned that such high costs would make NIM commercially unattractive for operations at any meaningful scale, leading to reduced demand.
BJP MLA Dhirendra Singh from Jewar, where the airport is located, also expressed dissatisfaction with the higher fares. He noted that initial flight bookings from Noida to Lucknow were priced above Rs 5,000, while flights from IGI to Lucknow were available in the Rs 3,000–4,300 range. Singh has appealed to the Prime Minister, Aviation Minister, and Uttar Pradesh Chief Minister to address this issue, emphasizing that the lower VAT on fuel should benefit the public.