Delhi airport to be world's most expensive: IATA

Policemen rest inside the newly constructed Terminal 3 at Indira Gandhi International Airport in New Delhi July 3, 2010.

NEW DELHI (Reuters) - The New Delhi airport will become the world's most expensive, with its operator GMR Infrastructure Ltd (GMRI.NS) permitted to raise charges, hurting the airport's ambition to become an aviation hub, an airline industry body said.

Earlier on Wednesday, GMR, which received a regulatory approval to raise the airport charges from May 15, called the increase "inadequate" to cover its costs.

Air ticket prices for international flights operating from the airport would rise by an average of 580 rupees, while domestic fares would increase by an average 290 rupees, GMR said in a statement.

The revised charges would push up the landing and parking fee for aircraft, apart from raising the user development fee, GMR said, a move that may discourage foreign airlines to operate to and from the Indian capital.

"India's aviation industry is already sick. This increase in Delhi's charges will put it in intensive care from a cost perspective," Albert Tjoeng, assistant director of corporate communications at International Air Transport Association (IATA) said in a statement.

The move may also hurt demand from cost-conscious Indians, who are already battling high inflation and have the option of travelling by much cheaper trains.

Airports Authority of India, Germany's Fraport (FRAG.DE) and Malaysia Airports Holdings Bhd are GMR's consortium partners for the airport.

(Reporting by Anurag Kotoky; editing by Malini Menon)