New Delhi: Mumbai International Airport Pvt. Ltd, or MIAL, will increase airport charges by 154% across the board from February. India’s airport regulator cleared on Wednesday MIAL’s proposal to do so.
The move came up for immediate criticism by analysts who said the regulator should have allowed introduction of user development fees on passengers only after the airport modernization was fully complete as was done in case of Delhi which was also privatized at the same time as the Mumbai airport—in 2006.
Delhi opened its modernized buildings in 2010 while the refurbished Mumbai airport will be ready only in 2014.
Between February and April, passengers using Mumbai airport will be levied a new user development fee (UDF) of Rs.346 on domestic flights and Rs.692 on international flights in addition to their regular airfare.
In April, the fee will come down to Rs.274 on domestic tickets and Rs.548 on international tickets and this will be applicable till March 2014, the Airports Economic Regulatory Authority said in a 556-page order, reviewed by Mint.
Mumbai airport is being modernized at a cost of Rs.11,647 crore. The other charges being raised include those on landing, parking, housing, aerobridges, fuel handling and unauthorized overstay by airlines, the regulator said.
Domestic flights will now pay 40% more to land while international ones will pay 120% more.
The GVK Power and Infrastructure Ltd-led MIAL will now become almost as expensive as Delhi International Airport Pvt. Ltd run by GMR Infrastructure Ltd which was modernized at a cost of $3 billion.
Mumbai airport already charges Rs.100 and Rs.600 on each domestic and international passenger as Airport Development Fee and will continue to do so till April 2021. The new UDF will be on top of this.
“Charging UDF when the airport facilities are not fully operational is not justified. UDF under the present state of Mumbai airport is probably ‘Under Development Fee,’” said Mohan Ranganathan, member of the government appointed Civil Aviation Safety Advisory Council, or Casac, referring to the incomplete airport. “It dents Aera’s credibility.” Air India’s former executive director Jitender Bhargava said he, too, did not agree with the regulator’s move.
“The recovery investments should be staggered over a 10 year period rather than 3-4 years time,” he said, adding that “Aera should look at failure of airport operators to exploit non-aeronautical sources for revenues and passengers and airlines cannot be the only source of recovery and expenses”.
A government official, who asked not to be identified, said the control periods of five years are defined by an act of Parliament and if the increase was not given in this current control period of 2009-2014, passengers would suffer in the control period that follows. The matter of allowing UDF only after airport modernization is complete “does not appear to have been raised under the open stakeholder consultation carried out”, he added