The Federation of Indian Airlines has approached the Supreme Court challenging a TDSAT order that recalculated airport tariff assets for Delhi airport. FIA says the ruling could lead to sharply higher airport charges, impacting airlines and passengers.
New Delhi: The Federation of Indian Airlines (FIA) has approached the Supreme Court challenging a recent order passed by the telecom tribunal regarding how aeronautical tariffs are calculated for airport operators.
The matter relates to the long-running dispute over airport charges at Delhi and Mumbai airports, which directly affects airlines and passengers.
The FIA has questioned the July 1 order passed by the Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT), arguing that the tribunal exceeded its authority while deciding the matter.
According to the airlines’ body, the tribunal failed to follow the limited directions given earlier by the Supreme Court and instead reopened issues that had already been finally settled.
The plea states that while passing the order, the tribunal has “gravely erred” by going much beyond the narrow scope of remand granted by the Supreme Court.
The FIA has alleged that the tribunal incorrectly revisited the calculation of the Hypothetical Regulatory Asset Base (HRAB), despite the Supreme Court having already rendered a final verdict on this issue on July 11, 2022.
The Federation of Indian Airlines has filed an intervention application in cases already pending before the Supreme Court.
These cases were originally filed by the operators of Delhi and Mumbai airports — Delhi International Airport Limited (DIAL) and Mumbai International Airport Limited (MIAL) — who have challenged the tribunal’s order.
Highlighting the serious impact of the tribunal’s decision, the plea says,
“The impugned judgment not only suffers from legal error but also has grave financial consequences. By inflating HRAB to Rs 4,848 crores, it grants DIAL an undue windfall, enabling perpetual recovery without commensurate investment.”
The FIA further warned that such inflated calculations will eventually hurt airlines and passengers. It stated,
“This burden will ultimately fall on airlines and passengers through higher airport charges, including landing, parking, and user development fees. The cascading effect is detrimental to consumer interest, contrary to cost-recovery principles, and inimical to the growth of the civil aviation sector.”
The Supreme Court is scheduled to hear the plea on December 16. The matter will be taken up by a bench comprising Justices Aravind Kumar and NV Anjaria, which is already hearing related disputes.
Explaining the background of the case, the plea said that the dispute began with the Airports Economic Regulatory Authority’s (AERA) tariff orders during the first control period for both DIAL and MIAL.
“In these orders, AERA computed the Hypothetical Regulatory Asset Base at Rs 966 crores for MIAL on the basis of straightforward calculations of aeronautical revenues, aeronautical expenses and corporate tax, consistent with the State Support Agreement (SSA) and AERA’s tariff guidelines.”
Both airport operators had challenged AERA’s tariff orders before TDSAT. However, those challenges were dismissed by the tribunal through its judgment and review order dated January 17, 2019. The matter then reached the Supreme Court through civil appeals.
The plea pointed out that the Supreme Court, in its final judgment dated July 11, 2022, upheld AERA’s tariff calculations, except on a limited issue related to corporate tax. Referring to this, the FIA said,
“Both MIAL and DIAL challenged these tariff orders before the tribunal. By judgment and further review order dated January 17, 2019, the tribunal dismissed the appeals. Civil appeals were carried to this court, which by its final judgment dated July 11, 2022 affirmed AERA’s tariff determinations, except on the limited issue of corporate tax.”
According to the FIA, after this final judgment, DIAL attempted to reopen the matter by relying on a letter dated May 24, 2011, issued by the Ministry of Civil Aviation (MoCA) to AERA. DIAL claimed that this letter supported a different method of calculating HRAB.
The plea states,
“The FIA said thereafter, DIAL sought to reopen the matter by placing reliance on a letter dated May 24, 2011, from Ministry of Civil Aviation (MoCA) to AERA, alleging that this letter supported an alternative methodology of HRAB computation.”
The plea further explained that this argument was raised for the first time only in 2023, long after the issue had been settled.
It said,
“This plea was raised for the first time before this court in 2023, long after the matter had attained finality. By order dated December 4, 2023, this court, while rejecting DIAL’s primary plea, remanded the matter to the tribunal for the limited purpose of examining the effect, if any, of MoCA’s letter dated May 24, 2011, on HRAB computation, and to take an independent view on whether ‘Single Till’ ought to be the basis of such computation,”
However, the FIA has alleged that TDSAT did not restrict itself to this limited examination. Instead, it went far beyond the Supreme Court’s directions.
“The FIR further said that TDSAT by its July 1, 2025, order travelled far beyond the scope of remand and instead of confining itself to the effect of the MoCA letter.”
The plea accused the tribunal of wrongly treating the MoCA letter as mandatory. It stated that the tribunal assumed the letter was binding on AERA, even though it was only an internal communication and clearly mentioned that no HRAB methodology existed at that time.
The FIA also pointed out that the tribunal replaced AERA’s original HRAB figure of Rs 966 crores with an inflated amount of Rs 4,848 crores. According to the plea, this resulted in a five-times increase in the tariff base without justification.
Summing up the legal issues involved, the FIA stated,
“The present appeal therefore raises substantial questions of law concerning: (a) the binding effect of internal governmental correspondence; (b) the sanctity of contractual provisions in tariff determination; (c) the limits of remand jurisdiction; and (d) the extent to which judicial or quasi-judicial bodies may interfere with regulatory expertise and settled determinations.”
The airlines’ body has urged the Supreme Court to step in and correct these “errors” to restore regulatory certainty. It has sought the setting aside of what it termed an inflated and unsustainable HRAB computation directed by TDSAT, and reaffirmation of the finality of earlier decisions.
The plea also highlighted that this long-standing dispute between AERA and the airport operators of Delhi and Mumbai could have serious consequences for air travellers. Any increase in airport user charges is likely to directly impact ticket prices, leading to higher airfares at the country’s two busiest airports.
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