India’s airport tariff regulator has directed major airports to slash landing and parking charges for domestic flights by 25% for a period of three months, providing relief to airlines grappling with financial strain triggered by the Iran war.
The move comes after leading carriers IndiGo and Air India sought rationalisation of airport-related fees as operational costs surged. Airlines are currently facing a double blow, with rising geopolitical tensions disrupting routes while continued restrictions on flying over Pakistan force longer, costlier flight paths.
According to the International Air Transport Association, airport and air navigation charges are the third-largest expense component for airlines globally, after fuel and labour.
In a related development, shares of IndiGo surged up to 10% on Wednesday, hitting the upper circuit, as the broader aviation sector rallied following the United States announcing a two-week ceasefire with Iran.
The directive was issued by the Airports Economic Regulatory Authority of India (AERA) under government instructions. The regulator stated that the reduction in charges will take immediate effect, adding that any revenue shortfall incurred by airports during this period will be adjusted in future tariff reviews.
