Airport fees in Mumbai to be hiked; Delhi could be next

Airport fees in Mumbai to be hiked; Delhi could be next

Mumbai/NewDelhi: The ministry of civil aviation has approved a request by Mumbai International Airport Ltd (Mial) to raise airport charges by 10% from 1 January, setting the stage for a similar decision at the New Delhi airport.

This means that landing charges, parking charges and passenger service fee payable by the airlines to the Mumbai airport will rise by that much. The current passenger service fee, paid by travellers, is Rs225 per ticket from all airports.

Mial, a joint venture company owned by a GVK group-led consortium and the Airports Authority of India, was formed in March 2006 to manage and develop the Chhatrapati Shivaji International Airport in Mumbai.

“The government has given us permission to raise those specific charges," confirmed a consortium spokesperson.

The airport has already told airlines about the hike.

According to a person close to the development, the ministry has cleared the proposal in light of MIAL’s capital expenditures. “It will consider Delhi International Airport Ltd’s plea in due course, since it also is a part of state support agreement," this person, who didn’t want to be identified, said.

“From a broader standpoint, the impact is likely to be offset by low fuel prices as and when the benefit gets passed on to the consumer by the airlines," said Mark Martin with consultant KPMG India.

“The timing is not right to increase airport charges as the domestic carriers are expected to post a combined loss of $2 billion in this fiscal," he noted, pointing to an often-cited combined industry loss figure.

The Mumbai hike comes at a time when international airports in Korea, Thailand, Singapore and Taiwan have tried to boost traffic by reducing costs for airlines.

Singapore’s Changi Airport, for instance, announced an extension of the 15% discount on landing fees in 2009 and topped that with an additional 10% discount.