India’s largest low-cost carrier, Air Deccan, has taken the first step in doing away with the Rs150 congestion charge levied on every ticket as the Saturday deadline set by the civil aviation ministry to reverse the tab draws near.
The congestion charge will be taken off tickets booked from Tuesday, said Anurag Jain, Air Deccan’s head of revenue and pricing. Instead, part of the surcharge will be added to ticket prices on some flights.
The charge will be completely waived on short-haul sectors such as Delhi-Jaipur, Jain said, but ticket prices on long-haul flights will be increased by up to Rs75.
Delhi-Mumbai or Mumbai-Bangalore will be some of the sectors affected. “The exact additonal charge will fluctuate depending on the length of the route,” Jain added.
Other budget carriers GoAir, SpiceJet and IndiGo said they are still working on how to let the surcharge go and will take a decision soon. Full service carriers are still to announce how the charge will be absorbed, but an industry analyst, who did not wish to be named, predicted they too would follow the Air Deccan model.
The regulatory body, the directorate general of civil aviation, had requested the airlines to withdraw the congestion charge after the Delhi high court expressed its “displeasure” over the levy that passengers all over India were asked to pay despite the congestion being localized at Mumbai and Delhi airports.
The airspace over the two airports, which handle about half the country’s passenger traffic, are so crowded that planes often hover for 45 minutes over them before landing.
Airlines have tacked surcharge to tickets since mid-December 2006 and are loathe to give up the extra money, saying they have to spend more on fuel burnt hovering over the two airports.
Kingfisher Airlines, run by Vijay Mallya, chairman of United Breweries, has seen its Mumbai-Delhi operations take four hours during rush hours—double the time during the rest of the day. The flight time is usually about one hour and 45 minutes.
Mallya said the reason to call the extra levy congestion charge was to make it clear to the passenger that the blame for the crowded airports lay at the government’s doorstep.
“Why call it a congestion surcharge? Because it just puts the government on the spot,” he said at an air financing conference here. “We are just playing with nomenclature.”
Kapil Kaul, an analyst with Centre for Asia Pacific Aviation, was dismissive of the debate on congestion charge.
The airlines are free to raise or lower their ticket prices the way they want to, and there is no regulation that can prevent an airline charging the extra Rs150-a-passenger charge as part of its ticket prices.