Adani Group Proposes User Development Fee at Mumbai Airport Amid Expansion Plans

The Adani Group-led Mumbai International Airport Limited (MIAL), which operates Chhatrapati Shivaji Maharaj International Airport (CSMIA), has proposed a hike in user development fees (UDF) for departing passengers. This marks the first UDF introduction under Adani Airports’ management. The proposal, subject to approval by the Airports Economic Regulatory Authority (AERA), aims to balance rising infrastructure investments with operational sustainability.

Proposed UDF Hike and Tariff Adjustments

Under the new tariff plan, MIAL has proposed a UDF of ₹325 per domestic passenger, where none was previously charged. For international passengers, the fee may rise from ₹187 to ₹650 per passenger. To offset this increase, the airport plans to reduce airline landing and parking charges by 35%, allowing airlines to manage operating costs efficiently and maintain competitive ticket prices.

AERA’s consultation paper issued on 10 March 2025 indicates that if the proposal is approved, the Yield Per Passenger (YPP) at CSMIA will increase by 18%, from ₹285 to approximately ₹332. The airport operator has justified the hike by citing increased capital expenditure, debt servicing, and operational losses.

Planned Infrastructure Developments

Over the next five years, MIAL plans to invest ₹10,000 crore in infrastructure enhancements. This includes redeveloping Terminal 1, which will be demolished and rebuilt with a modern facility capable of handling 20 million passengers annually, a 42% capacity increase. The terminal is expected to be shut down for reconstruction in November 2024, with completion anticipated between 2028 and 2029.

Additionally, Terminal 2 (T2) will see upgrades such as self-baggage drop systems, CTIX hand baggage screening, and full-body scanners to improve security efficiency. Runway maintenance, apron and taxiway enhancements, and sustainability initiatives—such as transitioning to electric vehicles and achieving net-zero emissions by 2029—are also part of the expansion plan.

Conclusion

The proposed UDF hike at Mumbai Airport, along with reductions in airline charges, reflects a strategic revenue shift to fund large-scale infrastructure improvements. As AERA reviews the proposal, the airport aims to strike a balance between cost recovery and enhancing passenger experience.

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