AERA Has Gone to Supreme Court – What’s the dispute about?

Briefly :

(a)   HRAB (Hypothetical Regulatory Asset Base)  – a calculation base used by the Airports Economic Regulatory Authority (AERA) to set aeronautical tariffs and User Development Fees (UDF) at Delhi International Airport (DIAL) and Mumbai International Airport (MIAL).

(b)   Background : DIAL and MIAL operate under Public‑Private Partnership (PPP) contracts (2009‑10 onward). AERA fixes tariffs based on a  Regulatory Asset Base (RAB)  and, for certain assets, a  Hypothetical RAB (HRAB) . The method of computing HRAB has been contested for years.

Timeline :

1.      2012‑13 : Operators (DIAL, MIAL) challenged AERA’s HRAB calculation.

2.      July 2025 : Telecom Disputes Settlement and Appellate Tribunal (TDSAT) struck down AERA’s HRAB methodology, saying it was wrong and ordered a fresh tariff recalculation.

3.      AERA’s concern : If the TDSAT order stands, UDF for Delhi could jump from ₹129 → ₹1,261 (900 % ↑) and Mumbai from ₹175 → ₹3,856 (2,100 % ↑), creating a ₹50,000 crore financial burden.

4.      Supreme Court appeal : AERA filed an appeal on 31 July 2025; the case is now before the SC (hearing on 3 Dec 2025).

Key points to brief :

1.      HRAB calculation  → basis for aeronautical tariffs & UDF.

2.      TDSAT ruling (July 2025)  → invalidated AERA’s method, prompting huge tariff hikes.

3.      AERA + MoCA  → filed SC appeal; MoCA backing AERA to protect passengers from shock fees.

4.      Impact : 900 % (Delhi) & 2,100 % (Mumbai) possible UDF hikes, ₹50k cr burden.

5.      Legal front : SC hearing on 3 Dec 2025; operators vs. regulator + govt.

Why it matters:

(a)   Passengers : Massive jump in ticket costs if UDF hikes pass.

(b)   Airports : Operators argue they need recovery of legitimate costs.

(c)    Policy : Balance between cost recovery for airports and protecting consumer interest.

Quick Briefing line:

–        “The MoCA is supporting AERA’s Supreme Court appeal against a TDSAT order that overturned AERA’s HRAB calculation for Delhi and Mumbai airports.

–         If the TDSAT view holds, UDF for domestic passengers could surge 900 % (Delhi) and 2,100 % (Mumbai), translating to a ₹50,000 crore financial hit.

–        The dispute is  on how the Hypothetical Regulatory Asset Base (HRAB) is computed and whether it should factor non‑aeronautical revenue.

–        The SC will hear it on 3 Dec 2025.”