Mumbai, New Delhi airports seek 10% increase in charges

Mumbai, New Delhi airports seek 10% increase in charges

New Delhi: For the second time this year, the operators of New Delhi and Mumbai airports have sought permission to raise airport charges by 10%.

If the hike is approved, it will further impact the loss-making airline firms in India, which are already protesting high taxes on jet fuel and high airport charges in privately operated airports that include Mumbai and New Delhi, the country’s largest airports by number of passengers served.

The airlines, who have posted losses on the back of an economic slowdown, are likely to pass on the increase to customers. Airline companies pay a fee every time an aircraft lands at an airport, which includes landing, parking and navigational charges.

A government official, who spoke on condition of anonymity, said the civil aviation ministry was examining the proposal from the airport operators.

A spokesman for Mumbai International Airport Ltd said the company has written to the aviation ministry for a 10% increase in aeronautical fees and that this increase “was to be effective from 3 May 2009", according to a privatization agreement the operator had signed with the government.

A spokesman for Delhi International Airport Ltd said it is “entitled" to a 10% increase for the year to March 2010 under the same agreement. The earlier 10% increase in the year was delayed and was mandated for fiscal 2008-09, he said.

The Federation of Indian Airlines (FIA), an industry lobby group, said it does not favour any further increase in such charges. “We are talking about already high charges. If there is another 10% increase, it would of course burden us," FIA secretary general Anil Baijal said.

The association represents all scheduled domestic carriers in the country, including National Aviation Co. of India Ltd-run Air India and private carriers Jet Airways (India) Ltd, Kingfisher Airlines Ltd, InterGlobe Aviation Pvt. Ltd-run IndiGo, SpiceJet Ltd, Go Airlines (India) Pvt. Ltd and Paramount Airways Pvt. Ltd.

Domestic carriers have been seeking a reduction in airport charges, which they claim is making their operations unviable. Civil aviation minister Praful Patel had said earlier this month that he does not believe the country’s airport charges are steep and added that the carriers could make a representation to the new airports regulator, Airports Economic Regulatory Authority (Aera), if they felt otherwise.

Both Mumbai and New Delhi airports earlier this year had been granted an increase of 10% in airport fees by the civil aviation ministry.

The ministry also allowed the two airports to charge an airport development fee of Rs200 from domestic passengers and Rs1,300 from international fliers at New Delhi and Rs100 and Rs600, respectively, from local and international passengers at Mumbai. This would generate Rs3,370 crore for the modernization of these airports.

An airline official said any increase would be passed on to the passengers. “Any increase in input cost does impact ticket pricing," SpiceJet chief commercial officer Samyukth Sridharan said.

After the earlier 10% hike, passenger service fees were increased to Rs233 per ticket from Rs225.

Baijal said while he was not aware of the new proposal to raise airport charges, he expects that Aera will review any fresh increase. Yashwant S. Bhave has taken charge as chairperson at the newly constituted body on 1 August.