FIA moves SC challenging TDSAT order on airport charges

New Delhi, Dec 13 (PTI) The Federation of Indian Airlines has moved the Supreme Court challenging an order of telecom tribunal over the principles for determination of aeronautical tariff in respect of airport operators.

The Federation of Indian Airlines (FIA) has challenged the July 1 order of the Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) saying the tribunal while passing the order has "gravely erred" in going far beyond the limited scope of remand directed by this court.

It said the tribunal has reopened and readjudicated issues relating to the computation of Hypothetical Regulatory Asset Base (HRAB), which had already attained finality by apex court's verdict dated July 11, 2022.

The FIA has filed an intervention application in pending matters where the two operators of Delhi and Mumbai airports, the DIAL and MIAL, have challenged the tribunal’s order.

"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.

"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 plea said.

The FIA's plea will be taken up for hearing on December 16 by a bench of Justices Aravind Kumar and NV Anjaria, which is hearing the dispute.

Giving the background, the plea said the dispute arose when Airports Economic Regulatory Authority (AERA's) first control period tariff orders qua 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 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," it said.

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. "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," it said.

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.

It said the tribunal had treated the MoCA letter as a binding directive to AERA, although the letter was only an internal communication and explicitly noted that no methodology existed on record for HRAB computation.

The FIA further said that the tribunal substituted AERA’s determination of HRAB (Rs 966 crores) with an inflated figure of Rs 4,848 crores, producing a five-fold escalation in tariff base.

"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," it said.

The plea sought apex court's interference in view of the "errors" and sought restoring regulatory certainty, reaffirming the finality of prior determinations, and set aside the inflated and unsustainable computation of HRAB directed by the TDSAT.

The long-standing dispute between the AERA and the operators of the Mumbai and Delhi airports may have an effect on the user tariffs, and consequently airfares, could shoot up at the two largest airports of the country. PTI MNL MNL SKY SKY