Smart Regulations by AERA: Raising the Bar for Air Travellers

AERA’s move to link airport tariffs with service standards signals a new era of smart regulation in India — putting passengers first while boosting efficiency, accountability, and global competitiveness.

Across the world — from the Asian Development Bank to the Wharton School and the World Economic Forum — policymakers and thinkers are recognizing the transformative potential of smart regulations. They enhance efficiency, reduce friction among stakeholders, and ensure that growth is both sustainable and inclusive. India too is beginning to embrace this philosophy. A strong example comes from the Airports Economic Regulatory Authority of India (AERA), whose recent initiative has the potential to change the way we experience air travel.

In a recent public notice, AERA announced its intent to formulate Rules and Performance Standards for Major Airports — defined as those handling over 3.5 million passengers annually. These standards cover quality, continuity, and reliability of service and associated activities, alongside the issue of tariffs. More importantly, this step is not merely a compliance measure. It is a conscious attempt to prioritize the flier’s experience — recognizing that the passenger is the true customer who ultimately pays for everything at airports and on airlines.

Linking Tariffs with Service

What makes this initiative unique is the direct connection between tariffs charged and services delivered. This means that airport operators will no longer be able to charge fees without ensuring visible and measurable service quality. For passengers, this could translate into very real improvements:

• Availability of trolleys at all times.
• Timely baggage delivery on arrival belts.
• Clean, hygienic, and functional toilets across terminals.
• Queue management systems that eliminate excessive waiting.
• Transparent tracking of dwell time — the time passengers spend at check-in, security, immigration, and baggage claim.

In the past, gaps in infrastructure and poor service delivery often led to chaos at airports, sometimes necessitating ministerial intervention. AERA’s move makes such lapses harder to ignore. Just as airlines are measured for On-Time Performance (OTP), now airports and other stakeholders too will be held accountable.

By adopting the well-known “carrot-and-stick” approach, AERA is introducing both incentives and penalties. Good performance will be rewarded, while lapses will attract consequences. This proven method aligns the interests of stakeholders with organizational objectives and, ultimately, passenger satisfaction.

Ensuring Inclusive Facilities

An important dimension of smart regulation is inclusivity. Airports are not just transit points; they are public spaces that must cater to senior citizens, differently abled persons, and passengers requiring special assistance. For these groups, long queues, inaccessible facilities, or inadequate support services can turn travel into an ordeal.

By linking tariffs with service delivery, AERA’s framework should ensure:

• Dedicated assistance counters for senior citizens and differently abled passengers.
• Priority access lanes at security and boarding gates.
• Wheelchair availability and escort services without delays.
• Barrier-free infrastructure — ramps, lifts, tactile flooring, and accessible restrooms.
• Golf carts for long walking distances within terminals, especially in large hub airports.
• Clear signage and trained staff to provide courteous support.

Globally, such provisions are standard benchmarks of quality. Embedding them into India’s regulatory framework will not only enhance the passenger experience but also reflect our commitment to equity, dignity, and universal access.

Why Smart Regulation is Essential

Smart regulation is not about creating more rules; it is about creating better rules. It ensures a win–win situation for all parties involved:

• For passengers, it guarantees better service and accountability.
• For businesses, it provides clarity, stability, and reduced friction in operations.
• For investors, it signals transparency and predictability.

Globally, smart regulations are associated with simplified licensing, digitized processes, and embedded feedback systems for continuous improvement. Governments across Asia-Pacific are actively reforming their regulatory environments to reduce business costs, attract investment, and encourage innovation. AERA’s step is a welcome alignment with this global trend.

However, the task is not easy. Regulators must strike a delicate balance — minimizing compliance burdens while safeguarding passenger interests.

The Indian Challenge

For a developing country like India, the case for smart regulation is even stronger. Travellers often encounter a stark contrast between airports within a span of just a few hours. This inconsistency reflects the urgent need to upgrade standards across the board.

If India is to emerge as a nation with multiple hub airports, competing with global hubs in the region, our facilities must offer world-class service. Barriers to efficient operations risk slowing down the growth of both passenger and cargo traffic. Smart, business-friendly regulation is the only way forward.

Encouragingly, India’s economy and aviation traffic have grown steadily over the past two decades (excluding the pandemic period). Yet, the ongoing tariff wars among airlines have raised serious concerns about sustainability. This is where a strong, business-friendly regulatory regime becomes critical — one that removes unnecessary burdens, ensures effective enforcement, and establishes benchmarks based on international best practices.

Benchmarking India’s Regulatory Quality

International comparisons highlight the urgent need for reform. According to the World Bank’s Worldwide Governance Indicators (2023), India’s Regulatory Quality percentile rank was just 14.8, placing the country in the lower end of the global spectrum.

This score reflects perceptions of the government’s ability to formulate and implement sound policies that support private sector development. Quite clearly, there is substantial room for improvement in both the regulatory framework and its enforcement.

The experience of countries like the Republic of Korea offers valuable lessons. Korea has made Regulatory Impact Assessments mandatory for over two decades, ensuring that new rules are not only well designed but also practically implementable. Importantly, these assessments are effective because they are backed by political commitment, institutional capacity, and transparency.

For India, adopting similar practices could strengthen policymaking, enhance investor confidence, and ensure that aviation growth is both sustainable and equitable.

Investing in Regulatory Quality

The aviation industry is one of the most capital-intensive sectors. India’s ambitions to expand its aviation footprint and develop hub airports cannot succeed without substantial foreign direct investment (FDI).

Here, the quality of regulation matters as much as physical infrastructure. Strong and predictable regulatory frameworks:

• Unlock sustainable growth.
• Diversify economic activity.
• Expand export markets.
• Attract diverse global investors.

In other words, investments in regulatory quality are as critical as investments in runways, terminals, and aircraft.

AERA’s Ray of Hope

Against this backdrop, AERA’s upcoming Stakeholder Consultation Meeting on 10 September 2025 assumes special significance. The meeting, aimed at formulating performance standards for major airports relating to quality, continuity, and reliability of service, is being widely regarded as a Ray of Hope for neglected air Travellers.

By linking tariffs to service standards and adopting a performance-driven framework, AERA has raised the bar. It has sent a clear message: passengers are no longer passive recipients but central stakeholders in aviation policy.

The responsibility now shifts to airport operators and airlines. They must Honour this new framework and deliver on their promise of service with a smile.

Conclusion

India stands at a critical juncture in its aviation journey. The sector has immense potential to drive economic growth, create jobs, and connect the nation more closely to the world. But realizing this potential requires more than new terminals and additional runways. It demands a regulatory framework that is clear, efficient, inclusive, and globally benchmarked.

Above all, smart regulation must ensure that airports remain inclusive — providing comfort and dignity to senior citizens, differently abled persons, and every passenger who uses them.

With its new initiative, AERA has demonstrated the will to move in that direction. By placing the passenger at the center of its reforms and linking tariffs with service delivery, it has created a blueprint for smart regulation in action.

If implemented with commitment, this could well become a model for other regulators in India — and a decisive step towards making Indian airports truly world-class.

About the Author:

G.S. Bawa is a Senior Aviation Consultant & Advisor and a former General Manager at Airports Authority of India, and former OSD at AERA.   A highly accomplished aviation professional with decades of experience in airport management, economic planning, corporate planning, airport regulatory affairs, public relations, and general administration, he offers strategic guidance and expertise to aviation organizations. His expertise spans domains such as Airport Planning & Development, Economic Planning, Statistical Analysis & Traffic Forecasting, Airport Tariffs, Public Relations, International Cooperation, and Training & Development.