Do airlines using Adani airports have to pay higher fees?
What's the story
The Adani Group and the Airports Economic Regulatory Authority of India (AERA) are embroiled in a legal dispute over airport charges. The conflict centers on how non-aeronautical revenues generated at airports should be factored into tariffs paid by airlines and passengers. The outcome of this dispute could determine whether passengers and airlines using Ahmedabad, Guwahati, Lucknow, Jaipur, Mangaluru, and Thiruvananthapuram airports will have to pay higher fees.
Legal proceedings
Legal battle shifts to Supreme Court
The legal battle is currently being fought in the Supreme Court. AERA has challenged a September 2025 Telecom Disputes Settlement and Appellate Tribunal (TDSAT) order that favored Adani Airports. The Supreme Court is likely to hear the case in July, according to its official website. The dispute covers six airports awarded to the Adani Group in 2019 under long-term concession agreements with Airports Authority of India (AAI).
Revenue concerns
Rating agencies flag regulatory risks for Adani airports
The tariff determination process for these airports has been delayed. For instance, Guwahati airport got its tariff order in September 2024, nearly three years after Adani took operational control. Credit rating agencies have flagged this as a major risk for the Adani airport platform due to its direct impact on cash flows and debt servicing capability. CRISIL recently noted that "regulatory uncertainty" over admissibility of non-aeronautical revenues remains a risk for the airports' debt service coverage ratio.
Tariff model
What is the core issue?
The core of the dispute is AERA's "hybrid till" tariff framework, which uses 30% of non-aeronautical revenues to subsidize aeronautical charges. These revenues are vital for airports as they boost income. The disagreement arose after Adani Airports structured their commercial operations through a Master Service Agreement (MSA) with AAHL. Under this arrangement, AAHL would operate certain non-aero businesses and pay either a minimum guaranteed fee or a percentage revenue share, whichever is higher.
Revenue assessment
AERA's concerns over related-party transactions
AERA contended that the MSA arrangement understated the true commercial earning potential of the airports. It examined related-party agreements involving AAHL and stressed all such transactions should be at "arm's length." The regulator also independently assessed the non-aero revenue assumptions instead of fully relying on the contracted MSA structure. AERA was concerned that recognizing lower non-aero revenues at the airport level would shrink cross-subsidization under hybrid till model, resulting in higher airport charges for airlines and passengers.
Industry response
Airline bodies supported AERA's stand
The tariff order also noted the objections from airline bodies including the Federation of Indian Airlines (FIA) and the International Air Transport Association (IATA). They broadly supported AERA's approach and also opposed any structure that could lead to higher aeronautical charges. The dispute eventually moved to TDSAT in 2024, where Adani-operated airports challenged multiple tariff orders issued by AERA. In September 2025, TDSAT ruled in favor of the airports on key issues including treatment of non-aero revenues under MSA structure.