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Govt may increase charges on airlines in peak hours

Govt may increase charges on airlines in peak hours
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First Published: Tue, Mar 06 2007. 12 45 AM IST
Updated: Tue, Mar 06 2007. 12 45 AM IST
Hoping to reduce congestion-related delays at three major airports in the country, the government might ask airlines to pay twice as much in airport charges during peak hours, but only half the current rates at night.
At the same time, the government may approve significant funds to modernize airports in Kolkata and Chennai, where overcrowding is not as intense, but may worsen in the coming years.
Even though a final decision is yet to be taken, civil aviation secretary Ashok Chawla said that the hikes in airport charges might force some airlines to consider adding flights during the early to mid-afternoon at Delhi, Mumbai and Bangalore airports: These three airports make up almost two-thirds of daily aircraft traffic in India.Overcrowded terminals and runways often leads to delays, where aircraft hover around the airport — sometimes for an hour— before they can land.
Almost all the airlines’ passed on the added fuel costs to customers by charging Rs150 for each ticket as congestion charges. “This system of incentives and disincentives, with an in-built element of financial reward” could help control the airlines’ urge to fly mostly during the peak hours, said Chawla. Landing and other airport charges make for up to 5% of total costs for airlines.
Overcrowding at major airports is mostly a result of inadequate infrastructure, and these measures are only short-term attempts to manage the traffic, while new airports, runways and terminals are built, said Chawla.
Airline passenger traffic in India has boomed since 2003, swelling almost 44 % in 2006 to 33 million passengers, straining airports. Chawla estimated that the airports were handling almost 20% more than their design capacity during peak hours.
Landing, parking and route navigation charges might be doubled for flights that land between the peak hours between 7-10am and 6-10pm. For late night flights between 12-5am, when most international flights land, charges will be halved. If approved, these new charges would kick in from late March.
The charges for an Airbus A320 would double to Rs33,000 during peak hours. International airlines flying A330s or similar planes would pay half of the approximately Rs94,000 they pay now at night hours. For Air India, this could be good news, said S. Venkat, a spokesperson and finance director. “Most of our flights land between midnight and 8 am, so we would be able to achieve substantial savings,” he said. Among domestic airlines, low-cost carriers would bear the brunt of the ‘time of day’ charges, A. Raghunathan, CFO of Kingfisher Airlines said. “They might have to back-out from the peak hours and reschedule their flights to abstain from becoming unviable.” Siddhanta Sharma, chairman of Spicejet, said airlines would meet Chawla to discuss this later this month. An Air Deccan spokesperson declined comment.
In Kolkata, where the government has strongly resisted any moves to privatise the existing Netaji Subhas Chandra International Airport, the aviation ministry is considering approving Rs2000 crore for modernisation expenses. The Airports Authority of India, which currently operates the airport, would carry out the modernisation process over the next 5-7 years, leaving it the only major airport that the authority would operate on its own.
In Chennai, the ministry is waiting for updates on issues related to land acquisition before reaching a final decision, said Chawla. But it is likely that the ministry will approve a model similar to that in Delhi and Mumbai, where the government allowed private companies to invest in the infrastructure and then operate the airports on a revenue sharing basis.
tarun.s@livemint.com
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First Published: Tue, Mar 06 2007. 12 45 AM IST