An empowered AERA, at last

An empowered AERA, at last

Collection of development fee at airports has been a contentious matter for a while. The impression that the Union civil aviation ministry was lax in the matter had gained considerable traction in recent years. A spate of litigation followed. On Tuesday, the Supreme Court delivered a verdict that has brought some welcome clarity to the subject. It has empowered, so to speak, the Airport Regulatory Authority of India (AERA).

The court has stopped the Mumbai International Airport Limited (MIAL) from collecting development fee from passengers flying from the airport. It, however, allowed the Delhi International Airport Limited (DIAL) to continue to levy this fee. This it did as AERA has already issued a public notice that allows DIAL to collect this fee, pending a final settlement of the issue. Both operators also have to account for the money they have already collected in the past years.

The judgment has implicitly criticized the manner in which the civil aviation ministry has functioned. This ministry’s working has been far from satisfactory in any of the tasks assigned to it; be they providing higher direction to the aviation regulator (the directorate general of civil aviation) or ensuring accountability on the part of private firms in the sector. It has also been careless in exercising the provisions of aviation laws, especially the Airports Authority of India Act 1994. The ministry could only issue an approval letter to DIAL and MIAL for charging the development fee, it could not fix its rate. That was for AERA to decide—a role that the ministry usurped when it fixed the development fee ( ,300 and 200 in the case of Delhi airport and 00 and 100 for Mumbai, the higher fee being for international flights and the lower one for domestic travel).

This was not an advertent overreach by the ministry. It is part of a pattern seen across government departments—overtly or otherwise. Regulators are often seen as unwelcome encroachers on what minister’s feel is their fief. The handing over of tariff setting powers and other functions to independent regulators is necessary to depoliticize the administration of complex sectors of the economy. The court has done well to read the rulebook to the ministry.

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