Mumbai: India’s airports—both government-run and privately operated—have become more expensive for both airlines and passengers, who are fuming over new charges imposed for the use of infrastructure and to raise funds for future development. Some of the new levies are directly charged to passengers and others to airlines, which in turn pass on the extra costs to fliers.
Also See List Of Levies (Graphic)
The latest is a 10% increase in airport charges levied from 1 March at 84 state-owned airports following a 27 February directive from the Airports Authority of India (AAI).
This came on the heels of a 10% increase in airport charges by private operators in Mumbai and Delhi.
The new levies come at a time when loss-making airlines are already struggling with high operating costs and declining passenger traffic in an economy headed for its slowest pace of growth in six years.
Domestic passenger traffic fell by about a sixth from a year ago in the peak October-January season. Airlines are expected to post combined losses of $2 billion this fiscal.
“The increases in the airport charges will have a dampening effect on passenger demand,” said Wolfgang Prock-Schauer, chief executive officer at Jet Airways (India) Ltd, the largest private carrier by passengers flown. “The market is so price-sensitive and any additional charges are going to affect the demand.”
Airport charges are typically for use of route navigation and terminal navigation facilities, and landing, parking and housing, and baggage X-Ray, among other things.
Though airport charges will be paid by airlines, the hike will increase the passenger service fee on tickets to Rs233 from Rs225.
On 16 February, the Hyderabad airport developer charged passengers Rs70 per head for using aero bridges, which connect the boarding gate to the aircraft door. Those who don’t use the bridges are charged Rs48. Such charges are known as common infrastructure charges.
The new Bengaluru International airport charges a user development fee, or UDF, of Rs260 per domestic passenger and Rs1,070 per international passenger. At the new Hyderabad airport, the fee is Rs375 and Rs1,000, respectively.
“Greenfield airports run by private players have increased the throughput charges. They are charging for everything. Instead of recovering the return on investment in next 20 years, private airport developers are trying to extract their profit in 10 years,” said a senior executive with National Aviation Co of India Ltd, or Nacil, that runs Air India. He did not want to be identified since he is not authorized to speak to the media.
From 1 April, GVK group-led Mumbai International Airport Ltd, that runs the Chhatrapathi Shivaji International Airport, will start charging Rs100 from outbound domestic passengers and Rs600 from international passengers as an airport development fee.
Domestic passengers flying out of New Delhi started paying Rs200 each from 1 March while international passengers pay Rs1,300.
But consumer rights groups are angry at the slew of new charges.
“It is ridiculous on the part of government to increase airport charges and highly unjustifiable from the part of airport developers to levy various fees on passengers,” said D. Sudhakara Reddy, national president and founder of the Chennai-based Air Passenger Association of India.
“Why would a passenger pay for a future development project taken up by a private airport developer? This is certainly going to arrest the passenger growth further.”
According to the International Air Transport Association, or Iata, the airport development fee charged in Delhi and Mumbai is to pre-finance airport development.
“Pre-financing increases the cost of air travel when passengers are made to pay for facilities that are not yet in use, and is unfair as there is no guarantee that passengers paying for future facilities today will use the service in the future,” it said in an emailed statement.
Graphics by Sandeep Bhatnagar / Mint