The Federation of Indian Airlines (FIA) has approached the Supreme Court challenging a July 1 order of the Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) on the principles for determination of aeronautical tariffs for airport operators.
In its plea, the FIA has contended that the tribunal “gravely erred” by travelling far beyond the limited scope of remand ordered by the Supreme Court and reopening issues that had already attained finality. The federation has filed an intervention application in pending matters in which Delhi International Airport Ltd (DIAL) and Mumbai International Airport Ltd (MIAL) have challenged the TDSAT’s order.
According to the FIA, the tribunal improperly revisited the computation of the Hypothetical Regulatory Asset Base (HRAB), despite the Supreme Court having conclusively settled the issue in its July 11, 2022 judgment, except for a limited question relating to corporate tax.
“The impugned judgment not only suffers from legal error but also has grave financial consequences. By inflating HRAB to Rs 4,848 crore, it grants DIAL an undue windfall, enabling perpetual recovery without commensurate investment,” the plea stated.
The federation warned that the increased tariff base would ultimately burden airlines and passengers through higher airport charges, including landing, parking and user development fees. It said the cascading impact would be detrimental to consumer interest and contrary to cost-recovery principles, besides harming the growth of the civil aviation sector.
The matter is listed for hearing on December 16 before a bench of Justices Aravind Kumar and N V Anjaria, which is already seized of the dispute.
Explaining the background, the FIA said the controversy originated from tariff orders passed by the Airports Economic Regulatory Authority (AERA) during its first control period for DIAL and MIAL. In those orders, AERA computed the HRAB at Rs 966 crore for MIAL, based on calculations of aeronautical revenues, aeronautical expenses and corporate tax, consistent with the State Support Agreement and AERA’s tariff guidelines.
Both airport operators challenged these orders before the tribunal, but their appeals were dismissed by TDSAT in January 2019. Subsequent civil appeals were decided by the Supreme Court on July 11, 2022, which affirmed AERA’s tariff determinations except on the limited issue of corporate tax.
The FIA alleged that after this final adjudication, DIAL attempted to reopen the matter by relying on a May 24, 2011 letter from the Ministry of Civil Aviation (MoCA) to AERA, claiming it supported an alternative methodology for HRAB computation. This argument, the federation said, was raised for the first time in 2023, long after the issue had attained finality.
By an order dated December 4, 2023, the Supreme Court rejected DIAL’s main plea but remanded the matter to TDSAT for the limited purpose of examining the effect, if any, of the MoCA letter on HRAB computation and to independently consider whether the “Single Till” approach should apply.
However, the FIA contended that in its July 1, 2025 order, TDSAT exceeded this limited mandate. It alleged that the tribunal treated the MoCA letter as a binding directive, even though it was only an internal communication that itself acknowledged the absence of any settled methodology for HRAB computation.
The federation further said that TDSAT substituted AERA’s HRAB determination of Rs 966 crore with an inflated figure of Rs 4,848 crore, resulting in a five-fold escalation of the tariff base.
“The present appeal raises substantial questions of law concerning the binding effect of internal governmental correspondence, the sanctity of contractual provisions in tariff determination, the limits of remand jurisdiction, and the extent to which judicial or quasi-judicial bodies may interfere with regulatory expertise and settled determinations,” the plea said.
Seeking the Supreme Court’s intervention, the FIA urged restoration of regulatory certainty and reaffirmation of the finality of earlier determinations, while setting aside what it described as an inflated and unsustainable HRAB computation directed by the tribunal.
The long-running dispute between AERA and the operators of Delhi and Mumbai airports is likely to have a direct bearing on user tariffs and, consequently, airfares at the country’s two largest airports.
