The decision of GMR-led Delhi International Airport Limited (DIAL) to slash the charges followed a directive by Airports Economic Regulatory Authority (AERA) for charging Rs 100 and Rs 600 per embarking domestic and international passenger respectively from January one.
Civil Aviation Minister Ajit Singh had earlier directed DIAL and Mumbai International Airport Limited (MIAL) to abolish DF at the two airports with effect from today.
Following this, DIAL had moved AERA, which, after consultations, decided to slash the rate that would remain effective till April 2016. Till today, the fee being charged at Delhi airport was Rs 200 and Rs 1300 for domestice and international passengers respectively.
Welcoming the order, DIAL said in a statement the measure would "enable airlines to reduce the overall travel cost of passengers, thus giving a boost to the Indian aviation sector."
In October, the Minister had also directed Airports Authority of India (AAI) not to levy DF at Chennai and Kolkata airports, which are being modernised by it.
AAI was also asked to infuse additional equity of approximately Rs 288 crore in MIAL and Rs 102 crore in DIAL, against its 26 per cent share in the equity in them.
In case the fee is abolished, the expected financing gap for MIAL will be estimated at about Rs 4,200 crore and for DIAL at about Rs 1,175 crore.
While DF is levied to meet cash flow requirements before completion of an airport upgrade project, User Development Fee (UDF) is charged for using the completed facility. At present, DF is levied at private-led Delhi and Mumbai airports, among others.