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Carriers’ income set to rise 20%

Carriers’ income set to rise 20%
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First Published: Tue, Mar 13 2007. 12 55 AM IST
Updated: Tue, Mar 13 2007. 12 55 AM IST
India’s busy airline companies may not like it, but a government proposal to introduce differential peak and non-peak landing and parking charges in Mumbai, Delhi and Bangalore airports will increase their revenues by more than a fifth.
Mumbai and Delhi airports, which account for more than half of the country’s air traffic, garner about a third of their revenues from landing and parking charges that airlines pay to use these airports.
The proposal will help decongest the airports at peak hours, an airport official said. “It’s a welcome move, if it comes through, that will help spread out facilities utilization, which is stretched during peak hours and under-utilized otherwise,” Arun Arora, an assistant vice-president at Delhi International Airport said, adding the proposal could be helpful until the main terminal at the airport is developed by 2010. About Rs123 crore of the airport’s Rs412.58 crore revenue between April and December 2006 came from landing and parking charges.
Airport charges in the country are already 62% higher than the international average according to consultant Centre of Asia Pacific Aviation. Dubai and Singapore airports are cheaper to land at.
With charges being doubled during the peak hours— three hours in the morning and four in the evening—India’s airport charges will soar further.
At current rates, the Airports Authority of India charges an Airbus A320 about Rs16,485 for landing and parking in India. Airlines will now pay double that charge, while an A330—flying international routes mostly, that today pays almost Rs63,500—will cross the Rs1 lakh mark each time it lands during peak hours.
The aviation ministry has said there would be adequate incentives during non-peak hours to make up for the hike in charges. But data from Mumbai International Airport Ltd shows 99 flights land in Mumbai in seven peak hours against just 32 that land midnight through early morning when the charges will be halved.
Meanwhile, a dozen short-haul planes such as turboprop ATRs, landing mostly during peak hours at Mumbai, are exempt from paying any landing and parking charges.
For domestic carriers, especially budget airlines that are struggling to break even, the increase may increase operating costs, eventually reflecting in higher fares.
Air charges for passengers flying during peak hours and those flying otherwise might be segregated.
Passengers already pay Rs150 as congestion fee and Rs750 as fuel surcharges.
KPMG’s executive director, advisory services, Rajeev Batra said airlines would not like to loose out on business travellers by rescheduling flights.
The Federation of Indian Airlines, a lobby group of domestic airlines, is meeting with civil aviation minister Praful Patel on Tuesday to discuss the charges.
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First Published: Tue, Mar 13 2007. 12 55 AM IST