Home / Companies / Domestic airlines cry foul as GMR refuses to budge on tariff revision

Mumbai: Domestic airlines are alleging that the operator of New Delhi’s Indira Gandhi International Airport is overcharging even though the tariff regulator had ordered a downward revision in airport charges for the 2014-19 period.

Though the regulator, Airport Economic Regulatory Authority (AERA) asked for a 96.08% cut in charges starting 1 January 2016, the operator Delhi International Airport Ltd (DIAL), controlled by the GMR Group, obtained a freeze on the tariff revision. DIAL has challenged the AERA order in the Supreme Court.

A hearing on the case has been postponed multiple times since April and is now slated for 1 July.

“All airlines have been asked to pay much higher landing and parking charges against what was suggested by AERA. We are the most affected airline as Delhi is our hub," said a senior executive at Air India Ltd. He declined to be identified.

Air India uses Delhi airport as a hub for a majority of its domestic and international destinations.

“DIAL has collected at least 200 crore additional from domestic airlines. This additional levy will adversely impact Air India as we are struggling with losses and debt," he said.

Air India is surviving on a 30,000 crore bailout package and has of debt of 51,000 crore.

“We cannot comment as the matter is sub-judice," a DIAL spokesperson said.

Airport charges, levied to finance capital expenditure and pay for maintenance, are set for a five-year duration called the control period. These charges are passed on by the airport to airlines and, in turn, to travellers.

Another senior airline executive agreed that DIAL continues to overcharge passengers at the Delhi airport.

“The ministry of civil aviation (MoCA) should have acted with alacrity the moment the regulator had given an order saying that the current airport charges were a gross over-recovery by the private operator and will lead to unjust gain at the expense of the passenger," said the executive, also requesting anonymity.

Instead, the ministry has been a mute spectator, he said, while pointing out that GMR had implemented a 350% hike in charges in its first control period between 2009 and 2014.

The Air India executive cited above pointed out that the Delhi airport is one of the costliest airports in terms of landing a Boeing B787 plane, B777-2LR plane or 777-3ER plane and is more expensive than Dubai, Singapore, Frankfurt and London.

In seeking a reduction in charges, AERA in its 22 January 2015 order had cited a “financial windfall and unjust gain to DIAL of hundreds of crores" at the cost of passengers and stakeholders.

“GMR has adopted the tactic of repeatedly appealing the independent regulator’s tariff order for the second control period for the Delhi Airport. This is hurting the passengers and airlines which continue to overpay the airport operator, with no mechanism of the excess being returned at a future date to the passenger," said an airport consultant requesting anonymity.

“It is clear that the airport is acting in its own best interest, despite that being totally against the interest of the Indian consumer. It is indeed sad that the operator can game the appellate process and make unjust financial gain at the expense of the passengers," he added.

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