India’s recent decision to reduce landing and parking charges for domestic flights by 25% is expected to have a negligible impact on airport revenues, according to S&P Global Ratings. The reduction, effective from 7 April 2026 for three months, will result in less than a 1% revenue loss for Delhi International Airport Ltd. and GMR Hyderabad International Airport Ltd. in fiscal year 2027.
The Airports Economic Regulatory Authority of India mandated the fee cuts, which apply to major airports across the country. Despite the reductions, both Delhi and Hyderabad airports are expected to maintain stable financial trajectories due to their diversified revenue streams. Non-aeronautical sources contribute 45%-55% of their total revenues, mitigating the impact of reduced aeronautical charges.
S&P Global Ratings noted that the revenue loss will be addressed through a true-up mechanism in the next tariff control period, allowing the airports to recover the lost income with interest over the subsequent five years. The positive rating outlook for these airports reflects potential improvements in the regulatory framework for tariff adjustments.
However, S&P Global Ratings cautioned that ongoing geopolitical tensions, particularly in the Middle East, could affect passenger traffic and delay credit profile improvements. The agency highlighted the unpredictability of the conflict’s duration and its potential impact on global economies and credit conditions.
Overall, whilst the fee reductions present a short-term challenge, the long-term outlook for India’s major airports remains positive, supported by regulatory mechanisms and diversified income sources.
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