New Delhi: India’s airlines, long opposed to fresh airport use charges at newly-built airports, have refused to charge such an additional fee as part of the airfare and plan to raise the issue with airport operators and the civil aviation ministry.
Two new airports at Hyderabad and Bangalore that started operations earlier this year have started levying, or are getting ready to charge what they call a user development fee (UDF) from domestic passengers. While Hyderabad airport operator GMR Hyderabad International Airport Ltd (Ghial) has started collecting Rs375 each from domestic passengers, the operator for the new Bangalore airport, Bangalore International Airport Ltd (Bial), plans a similar fee in the next few months to meet costs.
Costly flight: A file photo of the new Bangalore airport just before its inauguration. Bial plans to charge a user fee from domestic fliers soon. The operator of the new Hyderabad airport already collects a Rs375 user fee. Photograph: Hemant Mishra / Mint
This will be the first time in the country—since the 1999-established Cochin International Airport Ltd’s Rs500 additional fee levied between 2000 and 2006—that domestic passengers will pay over and above the passenger service fee of Rs225 they currently pay towards airport security and development on each ticket.
The typical airfare in the country over the past few years has also seen additions of what airlines call a fuel surcharge that is as high as Rs3,100 and an air traffic congestion fee of Rs150, introduced to reflect costs of extra fuel burnt due to hovering over congested airports such as Mumbai and New Delhi.
Ghial has said it plans to collect Rs375 a ticket at airport counters before passengers check in until September, after which it hopes airlines will include the fee as part of the air ticket.
But airlines, worried over dropping passenger counts especially since the start of this calendar year, are not keen on reflecting the charge on the ticket, fearing it could further stifle demand. They are asking airports to charge the new fee on their own. “That’s the position we are all taking,” said Wolfgang Prock-Schauer, chief executive of Jet Airways (India) Ltd, the country’s largest private airline group by passengers. “If the airports want to charge, they should charge at the counters by making the necessary arrangement because we have always been opposing the UDF. It’s a burden.”
Passengers travelling to nearby destinations from Chennai, Hyderabad and Bangalore have started shifting to travelling by trains, or buses as air travel gets expensive and commute time to the new Hyderabad and Bangalore airports, both at the outskirts of the two cities, has suddenly become more than an hour. Several of the grounded flights—in July, airlines have reduced nearly 20% of the weekly flights—in recent weeks were short-haul flights around Bangalore, Hyderabad and Chennai.
Prock-Schauer said airlines plan to discuss the issue at the next meeting of Federation of Indian Airlines, a lobby group of Indian carriers, and then with a 10-member committee comprising key public and private airport operators, airlines and civil aviation ministry officials. The committee was formed in June to look into airport-related issues.
Airport operators at New Delhi and Mumbai, too, want to introduce UDF levies, but the aviation ministry is still to grant them permission.
The introduction of UDF comes at a time when low-fare carriers, such as SpiceJet Ltd and InterGlobe Aviation Pvt. Ltd-run IndiGo that together control more than 20% of the domestic market, have reverted to offering air tickets with fares as less as Re1 basic fare and charging just the surcharges and taxes from passengers on high traffic routes after July flight occupancy slumped drastically.
“Right now, they (airlines) want to make sure fares are seen to be as low as possible and they don’t want to be seen as charging more,” said Kapil Kaul, an analyst with aviation consultant Centre for Asia Pacific Aviation. “Airlines will say they will not incorporate it, but eventually it will become part of airfare.”
Foreign airlines are already charging Rs1,000 as UDF on international tickets from Hyderabad and Bangalore and the fee may be applied to other airports under development, Kaul added.