Mumbai: GVK Group-controlled Mumbai International Airport Ltd (MIAL) will have to wait longer to increase tariff at the Chhatrapati Shivaji International Airport, with the regulator extending the current tariff rate beyond the expiry date of 30 November.
India’s airports regulator—the Airports Economic Regulatory Authority of India (Aera)—on Tuesday said the tariff approved by the authority in a 15 January 2013 order shall continue up to 28 February 2016, or until the final determination of the tariffs for the second control period, which is a time frame where a rate hike is applicable for an airport operator.
The second control period for MIAL is 2014-19, which means the tariff revision is already late by two years.
The delay in initiating a consultation process for determining tariff or delay in fixing the tariff will have adverse implications on travellers flying out of the airport in future. This is because the airport operator will have to charge more from travellers to recoup the expenses in shorter period of time as and when Aera approves the higher tariff for the second control period.
Aeronautical tariff approved by Aera on 15 January 2013 shall continue up to 28 February or until the final determination of the tariffs for the second control period (2014-19), whichever is earlier, Aera said.
“The revenue so collected by the airport operator (MIAL) during such period (2014-19) be adjusted from the aggregate revenue requirement for the second control period starting with effect 1 April 2014," Aera said in its order issued on 20 November.
The order was posted on its website on Tuesday.
Continuing the existing tariff also highlights that Aera has not come yet out with its consultation paper on tariff revision for Mumbai airport. Before finalizing revised tariffs, the regulator has to prepare a consultation paper and invite feedback from the stakeholders, including MIAL.
The Mumbai airport had got approval for a 164% increase in revenue from aeronautical charges last time, against a demand of 881%. Aera did not disclose when it will come out with the discussion paper on MIAL’s tariff revision.
The GVK Group is planning an initial public offer (IPO) for its airports business. The group will utilize the proceeds to retire debt worth around ₹ 3,000 crore.
GVK plans to club all its Indian airport units under GVK Airport Developers before listing. An IPO will make GVK Airport Developers Pvt. Ltd the first airport developer to be publicly traded.