Adani proposes to nearly double Mangaluru airport user fee by FY31

New Delhi: Flying out of Mangaluru airport could become substantially more expensive over the next five years, with operator Adani Airport proposing to nearly double user development fees by fiscal year 2031 (FY31) to help fund a ₹4,200-crore investment plan.

Passengers currently pay a user development fee (UDF) of ₹735 for domestic departures and ₹1,120 for international departures. The proposed revision would raise these charges to ₹890 and ₹1,360, respectively, from 1 December 2026, subject to regulatory approval. By March 2031, the fees would reach ₹1,440 for domestic departures and ₹2,210—increases of about 96% and 97%, respectively.

Also Read | Inside the Adani-run Mumbai airport standoff

The proposed tariffs will rise by 20-22% across each of the first three revisions before moderating to a 10% increase in the final phase through March 2031. The proposed hikes build on steep revisions in recent years: domestic departure fees surged 390% from ₹150 in 2022 to ₹735 in FY26.

Arriving passengers will also face higher charges. Domestic arrival fees are set to rise from ₹315 to ₹380 initially, eventually reaching ₹620 by FY31. Similarly, international arrival fees will increase from ₹480 to ₹580 in the first year before rising to ₹940. These are proposed rates, and the regulator is yet to announce the final fees.

User development fees are included directly in airfares, collected by airlines at the time of booking, and subsequently remitted to the airport operator.

Mangaluru already has one of the highest domestic departure user development fees in the country—significantly above Hyderabad’s ₹515 and Bengaluru’s ₹300 under tariffs effective from September 2026. By comparison, major hubs like Delhi and Mumbai charge domestic departure fees in the range of ₹120- ₹130.

Yet, Mangaluru operates at a fraction of their scale. The airport averaged roughly 50 daily aircraft movements in FY26, compared with about 769 flights per day in Bengaluru and 570 in Hyderabad.

This raises questions over whether the scale and timing of the proposed capex and the accompanying fee hikes are aligned with Mangaluru’s actual traffic growth.

However, Mangaluru International Airport Ltd (MgIAL), the Adani Airport special purpose vehicle that manages the facility, maintains that the capital expenditure is essential to upgrade infrastructure and handle anticipated passenger expansion.

“Airport development is essential, but major capex must be justified by capacity needs and phased in line with traffic growth. Higher charges could burden passengers and airlines,” said Ankur Singhal, founder of BASPIN Consulting.

“Cost recovery must be linked to timely project delivery and service quality, backed by strong regulatory oversight to ensure accountability, affordability and tangible benefits for all stakeholders,” he added.

In its 7 October letter to the Airports Economic Regulatory Authority of India (AERA) — the airport tariff regulator — signed by Madhur Arora, authorised signatory for MgIAL, the operator said, “While setting the tariff, complying with Section 13 of the AERA Act, it is essential for AERA to ensure the economic and viable operations of the airport.”

The letter said the proposed tariff is based on traffic estimates in AERA’s consultation paper. MgIAL assumed existing tariffs would apply until 30 November 2026 and asked the regulator to consider its responses and allow it to revise the tariff card before the final order.

The investment plan cites runway-related compliance requirements, taxiway congestion, the absence of an isolated aircraft parking position and the need to expand the terminal. Its master plan envisages terminal modifications and expansion to cater to demand until FY35, equivalent to about five million passengers annually.

Mangaluru airport handled 2.55 million passengers in FY26. MgIAL projects traffic will rise to 2.92 million in FY27, 3.34 million in FY28, 3.59 million in FY29 and 3.85 million in FY30, before reaching 4.11 million in FY31—growth of about 61% in five years.

The multi-year tariff proposal pegs total capital expenditure for the FY27–FY31 period at ₹4,205.87 crore, with base aeronautical expenses forming the bulk at ₹2,930.58 crore.

Key outlays include ₹1,674.2 crore for runway, taxiway, and apron developments; about ₹1,000 crore for terminal modification and expansion; ₹1,118.65 crore for ancillary infrastructure; about ₹200 crore for access road networks; and about ₹300 crore for additional operations, safety, and infrastructure equipment. Spending is concentrated in FY29, with further substantial expenditure projected for FY31.

MgIAL has sought a fair rate of return of 14.73% on its regulatory asset base (RAB)—the total pool of regulated assets on which an operator is permitted to earn a return. This rate represents a regulated return benchmark rather than the actual internal rate of return on Adani’s initial investment.

Mangaluru was among six airports privatised in 2020 and 2021, along with Ahmedabad, Lucknow, Jaipur, Guwahati and Thiruvananthapuram. Adani won the bids to operate all six. A third round, covering 11 airports, is under discussion following the initial 2006 privatization of Delhi and Mumbai airports.

AERA and Adani Airport did not respond to queries from Mint.

Abhishek Law has spent 18 years in journalism, which in news industry terms means he has survived several newsroom restructurings, countless “urgent” press releases, and more cups of tea than he can reasonably count. Based in New Delhi, he covers aviation for Mint, a sector where aircraft, oil prices, geopolitics and airline CEOs regularly conspire to make his life interesting.<br><br>Most of his time gets occupied by translating airline jargon like ASKs, yields, load factors and fleet strategies into language that doesn’t require a pilot’s licence. His motto is simple: if readers need a glossary, he hasn’t done his job properly.<br><br>On most days, the quadragenarian is tracking airline strategies, policy changes and the occasional mid-air disruption that suddenly become a stock market story. When planes are behaving themselves (which is not very often nowadays), he strays into other corporate beats like steel, trying to figure out what’s really happening.<br><br>He loves to talk, especially ask—that one more question which people are uncomfortable with, and saving contacts in his phone as a "Source who may or may not pick up calls”. <br><br>But, on a serious note, the goal remains simple: cut through jargon, find that additional detail, and turn complicated business stories into something one can actually enjoy reading.

Get Latest real-time updates

Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

✕

Wait for it…

Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.