Proposal to increase fees at Mumbai, Delhi turned down

Proposal to increase fees at Mumbai, Delhi turned down
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First Published: Thu, Sep 04 2008. 12 46 AM IST
Updated: Thu, Sep 04 2008. 12 46 AM IST
New Delhi: The civil aviation ministry has rejected a proposal by the country’s two largest airports at Mumbai and Delhi to increase airport charges such as landing, parking and passenger fees by 10%, which would have increased costs for airline firms.
The GVK Power and Infrastructure Ltd-led Mumbai International Airport Pvt. Ltd (Mial), which took over the airport in 2006, sought to increase airport charges as per the terms agreed upon with the government then. The airport operator is allowed to increase airport charges after two years, provided it has completed a specified schedule of work mandated in the first phase of expansion ending March 2010.
Late last month, civil aviation minister Praful Patel had confirmed airport operators at Mumbai and Delhi were seeking an increase in fee structure and the proposals were being examined. Airports such as Mumbai typically charge about Rs31,000 as route navigation facility charges, terminal navigation landing charges, and landing and parking charges for an Airbus SAS-made A320 plane, besides a Rs225 airport usage fee per passenger.
“It is being put on hold,” said an aviation ministry official of the requests from Mial and Delhi International Airport Pvt. Ltd to raise airport charges, adding that the firms will be advised to wait until the Airports Economic Regulatory Authority (Aera) meant to screen and allow such charges is in place. The official did not want to be named.
In recent months, the new airports at Bangalore and Hyderabad have been allowed to levy a so-called user development fee from departing international passengers of Rs1,070 and Rs1,000, respectively; domestic passengers in Hyderabad are levied Rs375 each.
Representatives from National Aviation Co. of India Ltd, which runs Air India; Jet Airways (India) Ltd; Deccan Aviation Ltd into which Kingfisher Airlines Ltd is merging; SpiceJet Ltd; and InterGlobe Aviation Pvt. Ltd-run IndiGo met ministry officials last month to discuss implications of such an increase at Mumbai and Delhi.
“What we said was that while these charges are fine, the issue is the timing of the charges,” said Samyukth Sridharan, chief commercial officer at low-fare airline SpiceJet, adding that any hike in airport charges would be passed on to the consumers and it was not in the interest of the industry facing twin pressures of cost increases and slowing passenger demand to do so. “I think we will have to wait till the next calendar year till (aviation fuel) prices cool off,” he said.
The long delayed Aera Bill is likely to be introduced in the forthcoming session of Parliament, but experts predict the regulator will not be in place before early next year. 
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First Published: Thu, Sep 04 2008. 12 46 AM IST