The Airports Economic Regulatory Authority of India Act, 2008 (AERA Act) was enacted to establish an independent regulatory framework for India's aviation sector, particularly focusing on tariffs, service standards, and economic oversight of airports. The Act came into force on 5th December 2008, with the primary objective of ensuring fair pricing, efficient operations, and consumer protection in the rapidly growing aviation industry. The creation of the Airports Economic Regulatory Authority (AERA) marked a significant shift from direct government control to a structured regulatory mechanism.
Limited Scope:
AERA regulates only major airports (handling >3.5 million passengers annually), leaving smaller airports under AAI.
Government Interference:
Section 42 allows the Central Government to issue binding policy directions, raising concerns over autonomy.
Delays in Tariff Revisions:
The five-year tariff cycle sometimes lags behind dynamic market conditions.
Balanced Economic Regulation:
Ensures fair pricing for airlines and passengers while allowing airports to recover costs.
Encouraged Private Investment:
Provided clarity on tariff structures, boosting PPP models in airport development (e.g., Delhi, Mumbai airports).
Consumer Protection:
Mandates transparency in fee determination and service standards.
Judicial Oversight:
Reduced litigation by providing a dedicated appellate mechanism (TDSAT).
The AERA Act, 2008 was a landmark step in India’s aviation sector, introducing a market-friendly regulatory framework. While it has successfully attracted private investment and improved service standards, challenges like bureaucratic delays and scope limitations persist. Future reforms could focus on expanding AERA’s jurisdiction and enhancing operational autonomy to keep pace with India’s growing aviation demands.