Navi Mumbai airport struggles to attract international airlines; AERA widens tariff incentives

Fresh updates from the financial markets indicate that Navi Mumbai International Airport (NMIA) is facing reluctance from airlines to start international operations despite its international terminal and airside infrastructure being commissioned, prompting the Airports Economic Regulatory Authority of India (AERA) to widen landing-charge incentives for carriers rolling out flights from the new airport.

In an addendum issued on September 8, AERA changed the eligibility criterion under NMIA’s Variable Tariff Plan (VTP) from a “New Route in MMR Region” to a “New Route from NMI”.

The change means an international destination already served from Mumbai airport can still qualify for the concession if an airline starts operating that route from Navi Mumbai.

Airlines reluctant to start international flights

Navi Mumbai International Airport Ltd (NMIAL), the airport operator, told AERA that airlines have been unwilling to commence international operations from NMIA despite the concessions under the approved VTP.

According to the regulator's order, airlines have attributed their reluctance partly to the level of aeronautical tariffs. NMIAL additionally highlighted the impact of prolonged geopolitical conflicts, elevated fuel prices, airspace closures, insurance surcharges and subdued demand.

These factors have made airlines more risk-averse around committing international capacity at a new airport, resulting in underutilisation of the international terminal and airside infrastructure, NMIAL stated.

The airport operator as a result sought a modification to the VTP so that the concessional tariff would apply to routes that are new from Navi Mumbai, rather than only routes that are new across the Mumbai Metropolitan Region (MMR).

AERA agreed with the request, saying the existing structure did not provide a sufficiently targeted incentive for airlines to utilise infrastructure created at the greenfield airport.

The regulator stated the VTP was designed specifically to encourage airlines to commence or start operations from a new airport, helping ramp up aircraft movements and passenger traffic and improve utilisation of newly created terminal and airside capacity. 100% landing-charge waiver

Under the revised framework, new international passenger routes will receive a 100% waiver on landing charges in the first year.

Short-haul international routes of up to 5,000 km will get a further 50% discount in the second year. For routes above 5,000 km, the discount will be 50% in the second year and 25% in the third year.

The VTP additionally provides incentives for additional international frequencies, with discounts of up to 75%. International freighter services will receive a 90% discount in the first year and 50% in the second year.

AERA stated the revised structure is intended to strengthen the effectiveness of the existing VTP without changing its fundamental regulatory framework. It anticipates the modification to encourage airlines to introduce and sustain international connectivity from NMIA and progressively gain passenger and aircraft movements.

Destination need not be new to Mumbai

The key change is that an airline will no longer have to introduce a destination that is completely new to the MMR to qualify for the incentive.

Instead, the route only needs to be new from Navi Mumbai. This could allow NMIA to target international destinations already served from Mumbai's existing airport and encourage airlines to add capacity from the new facility.

The move could give airlines a softer-cost entry point while NMIA builds its international network. For passengers, greater airline participation could bring more direct international destinations and competitive launch fares. The incentives for freighters could additionally help build cargo connectivity.

NMIA is being developed through a public-private partnership between Adani Airport Holdings and CIDCO. It is designed to scale from an initial annual capacity of 20 million passengers to 90 million passengers, with a scheduled full-build-out cargo capacity of 3.2 million tonnes.

AERA stated all other terms and conditions of the VTP approved in May 2026 will stay unchanged. The first control period runs from April 1, 2025 to March 31, 2030.