Photo: Hemant Mishra/Mint
Photo: Hemant Mishra/Mint

Airport regulator further defers tariff hike for Mumbai International Airport

The current tariff is set to expire on 28 February, but Mumbai International Airport failed to initiate the process of determining the new tariff

Mumbai: India’s airport tariff regulator has further deferred a tariff hike for the Mumbai International Airport Ltd (MIAL) that operates the Chhatrapati Shivaji International Airport in Mumbai.

MIAL is a joint venture between the GVK Group led consortium (74%) and Airports Authority of India (26%).

The current tariff is set to expire on 28 February, but MIAL failed to initiate the process of determining the new tariff.

The Airport Economic Regulatory Authority of India or Aera on Monday said the tariff approved by the authority through a 15 January 2013 order shall continue up to 31 May 2016 or until the final determination of the tariffs for the so-called second control period—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. In December 2015, Aera extended the validity of tariff up to 28 February. The repeated extensions or delay in initiating a consultation process for determining tariff will have negative 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 its expenses in a 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 31 May 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 Monday.

Before fixing the tariff, Aera has to come out with a consultation paper on tariff revision for Mumbai airport 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.

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