International travel from Navi Mumbai International Airport (NMIA) could become cheaper and connectivity from the airport could improve after the Airports Economic Regulatory Authority of India (AERA) approved a revised variable tariff plan aimed at encouraging airlines to launch new international routes from the airport.
Under the revised framework, airlines launching new international passenger routes from NMIA will get a 100% waiver on landing charges in the first year of operation. For short-haul international routes of up to 5,000 km, airlines will receive a further 50% discount on landing charges in the second year.
For long-haul routes of more than 5,000 km, the landing-charge discount will be 50% in the second year and 25% in the third year.
Targeted Incentives
The revised tariff structure changes the eligibility criterion for the incentives from a “new route in the Mumbai Metropolitan Region” to a “new route from Navi Mumbai International Airport”. This is expected to make the incentive more targeted towards attracting new international services to NMIA.
The earlier variable tariff plan (VTP) had also provided a zero landing-charge rate in the first year for qualifying new international routes. Therefore, the latest revision does not represent the introduction of a new first-year waiver but changes the definition of what qualifies for the incentive, making it more focused on traffic development at NMIA.
The airport operator had sought the change as the earlier criterion could limit the benefits available for routes from Navi Mumbai if the same destination was already served from Mumbai’s Chhatrapati Shivaji Maharaj International Airport.
AERA has also approved incentives for airlines adding international frequencies from NMIA. Depending on the qualifying service, airlines can receive discounts of up to 75% on landing charges.
The framework also provides incentives for international freighter operations. New international freighter services will receive a 90% discount on landing charges in the first year and 50% in the second year.
The move comes as NMIA seeks to build up its international passenger and cargo operations and establish itself as a second major aviation gateway for the Mumbai Metropolitan Region.
For passengers, the incentives could encourage airlines to launch new direct international services from Navi Mumbai, potentially increasing destination choices and competition on international routes. Airlines may also use the lower initial operating costs to offer competitive introductory fares as they establish new routes.
The incentives could be particularly significant for international routes where airlines typically face higher initial costs while building passenger demand and establishing route economics.
Boosting Capacity
NMIA, developed through a public-private partnership between Adani Airport Holdings and the City and Industrial Development Corporation (CIDCO), is designed to handle 20 million passengers annually in its initial phase. Its capacity is planned to scale up to 90 million passengers a year and 3.2 million tonnes of cargo annually at full build-out.
The revised tariff plan is therefore aimed not only at attracting passenger airlines but also at accelerating the development of Navi Mumbai as an international cargo and logistics hub.