Landing, parking, navigation and other airport charges in India are as much as 62% more than in other countries, an aviation researcher says, predicting the rates will reduce once an airport regulator is in place.
Consider this: When an Airbus A330 200 plane from, say, London, lands at Delhi’s international airport, it pays nearly Rs63,500, including parking fees, to the airport management. When the same aircraft lands in Dubai, the charges are just Rs35,500.
A 2005 study by the Vancouver-based Air Transport Research Society concluded that compared with India, landing charges for long-haul Boeing 747 in the Asia Pacific were lower at the Kuala Lumpur, Thailand, Dubai, Adelaide, Jakarta, and Singapore airports. Analysts say the situation has not changed since.
The current aerocharge regime could change if the airport regulator bill is approved by Parliament, experts say. The Centre intends to introduce the Airport Economic Regulatory Authority Bill in the Budget session of Parliament, which begins on 23 February.
Airport administrators say the landing and parking charges, called ‘aerocharges’ in aviation parlance, have to be kept high because Indian airports do not have the benefit of revenues coming from duty-free and other retail establishments on their premises. Such ‘non-aeronautical’ charges at Heathrow Airport in London form 53% of its total revenues, at Changi in Singapore, 58%. In India, Delhi’s—at 30%—is the highest; at all other Indian airports, it is much lower.
Particularly irksome to airlines, which have been asking for a reduction in aerocharges at Indian airports, is that the landing charges are the same at a large airport like Mumbai as at a smaller one, say, Kanpur. So, an Airbus 320 carrying a plane-load of passengers to Delhi will pay nearly Rs12,700 to land in Delhi on a domestic flight and the same amount in Thiruvananthapuram. “This (uniform domestic landing charge) is part of an old policy, which was meant to keep smaller airports, which sometimes had just two flights a day, afloat,” explains S. Singh, an executive director in charge of air-traffic management at the Airports Authority of India (AAI). In 2004, AAI cut landing charges by 15% for domestic flights if airlines made these payments in two weeks and waived off landing charges for aircraft that had less than 80 seats.
Another anomaly is that the rates are the same regardless of whether the plane lands or takes off at peak hour—between 7am and 10am—or not.
“The price changes after privatization will depend on the regulation set in place,” says Paul Lan, managing director of the global airports team at KPMG’s London offices, who is advising the new managements at the Mumbai and Delhi airports, which are being expanded.
An increase in non-aeronautical revenues could help airport operators cushion the reduced tariffs. Aerocharges, says Kapil Kaul, an analyst at the Center for Asia Pacific Aviation, will come down as non-aeronautical revenues increase.
That, however, will take time.
“We expect our non-aeronautical revenues to shift to a mix of 45-55%, but it will take at least seven years or probably more,” says a Mumbai International Airport Ltd spokesman.