AERA Act, 2008, was enacted by Parliament and was notified in the Gazette of India vide Gazette No.36 dated 05.12.2008. The Act provides for the establishment of an Airports Economic Regulatory Authority (AERA) to regulate tariff and other charges for the aeronautical services rendered at airports and to monitor performance standards of airports. Thus, AERA is the economic regulator of the airport infrastructure sector and air navigation services in the country.
The Central Government notified the establishment of the Authority with effect from 12th May, 2009; vide Gazette Notification (GSR) No.317(E) dated 12th May, 2009.
The provisions of AERA Act, except chapter III and chapter VI, came into force on 1st day of January 2009. The provisions of Chapter III and VI also came into force from first day of September, 2009.
  • "Airport" means a landing and taking off area for aircrafts, usually with runways and aircraft maintenance and passenger facilities and includes an aerodrome as defined in clause (2) Of section 2 of the Aircraft Act, 1934;{ Section 2 (b) }
  • "Major Airport” means any airport which has, or is designated to have, annual passenger throughput in excess of 3.5 million(as per Amendment, 2019) or any other airport as the Central Government may, by notification, specify as such;{ Section 2 (i) }
  • "Airport User” means any person availing of passenger or cargo facilities at an airport;{ Section 2 (c) }
  • "Aeronautical Services” means any service provided for-
    • Navigation, surveillance and supportive communication thereto for air traffic management;
    • Landing, housing or parking of an aircraft or any other ground facility offered in connection with aircraft operations at an airport;
    • Ground safety services at an airport;
    • Ground handling services relating to aircraft, passengers and cargo at an airport;
    • Cargo facility at an airport;
    • Supplying fuel to the aircraft at an airport; and
    • Stake-holder at an airport, for which the charges, in the opinion of the Central Government for the reasons to be recorded in writing, may be determined by the Authority;{ Section 2 (a) }
  • To determine the tariff for the aeronautical services taking into consideration—
    • The capital expenditure incurred and timely investment in improvement of airport facilities;
    • The service provided, its quality and other relevant factors;
    • The cost for improving efficiency; Economic and viable operation of major airports;
    • Revenue received from services other than the aeronautical services;
    • The concession offered by the Central Government in any agreement or memorandum of understanding or otherwise;
    • Any other factor which may be relevant for the purposes of this Act:

Provided that different tariff structures may be determined for different airports having regard to all or any of the above considerations specified at sub-clauses (i) to (vii);

  • To determine the amount of the development fees in respect of major airports;
  • To determine the amount of the passengers service fee levied under rule 88 of the Aircraft Rules, 1937 made under the Aircraft Act, 1934;
  • To monitor the set performance standards relating to quality, continuity and reliability of service as may be specified by the Central Government or any authority authorized by it in this behalf;
  • To call for such information as may be necessary to determine the tariff under clause (a);
  • To perform such other functions relating to tariff, as may be entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act.
  • Where the Authority considers it expedient so to do, it may by order in writing—
    • Call upon any service provider at any time to furnish in writing such information or explanation relating to its functions as the Authority may require to assess the performance of the service provider; or
    • Appoint one or more persons to make an inquiry in relation to the affairs of  any service provider; and
    • Direct any of its officers or employees to inspect the books of account or other documents of any service provider.{ Section 14(1) }.
  • The Authority shall have the power to issue such directions to monitor the performance of the service providers as it may consider necessary for proper functioning by service providers.{ Section 14(4)) }
  • The Authority may, for the purpose of discharge of its functions under the Act, issue, from time to time to the service providers, such directions, as it may consider necessary. {Section 15}.
  • The Authority or any other officer specially authorized by it in this behalf may enter any building or place where the Authority has reason to believe that any document relating to the subject matter of the inquiry may be found, and may seize any such document or take extracts or copies therefrom subject to the provisions of section 100 of the Code of Criminal Procedure, 1973 in so far as they may be applicable.{ Section 16 }

As per Section 13(2) of the Act, the Authority shall determine the tariff once in five years and may if so considered appropriate and in public interest, amend, from time to time during the said period of five years, the tariff so determined.

1.   Ahmedabad
2.   Amritsar
3.   Bengaluru 
4.   Bhubaneswar
5.   Calicut
6.   Chandigarh
7.   Chennai
8.   Cochin
9.   Delhi
10.   Goa
11.   Guwahati
12.   Hyderabad
13.   Jaipur
14.   Kannur
15.   Kolkata
16.   Lucknow
17.   Mangalore
18.   Mumbai
19.   Patna
20.   Pune 
21.   Raipur
22.   Shirdi
23.   Srinagar
24.   Thiruvananthapuram
25.   Tiruchirappalli
26.   Varanasi

Chairperson and Members: The Authority shall consist of a Chairperson and two other Members to be appointed by the Central Government: Provided that wherever the Authority is deciding a matter involving a civil enclave in a defence airfield, there shall be an additional Member, not below the rank of Additional Secretary to the Government of India, to be nominated by the Ministry of Defence. { Section 4(1) }

Secretary and other officers : The Central Government may appoint a Secretary to discharge his functions under the Act. The Authority may appoint such officers and other employees as it considers necessary for the efficient discharge of its functions under the Act. The Authority may engage, in accordance with the procedure specified by regulations such number of experts and professionals of integrity and outstanding ability, who have special knowledge of, and experience in, economics, law, business or such other disciplines related to aviation as it deems necessary to assist the Authority in the discharge of its functions under this Act. { Section 9 (1), (2), (4) }

User Development Fee is levied under rule 89 of the Aircraft rules 1937. UDF is conventionally levied to ensure fair return to the airport operators on the investments made for providing airport services. In other words, UDF is intended to cover any deficit in revenues so as to ensure fair return on investment.

In terms of rules 86, 88 and 89 of the Aircraft Rules, 1937, the rates of the tariff charges, the passenger service fee, and the user development fee, charged/levied at the major airports are to be as determined by AERA.