On all cylinders I Carriers say hike in infra charges will make Delhi airport most expensive in Asia
The Delhi airport may become most expensive in Asia following increase in infrastructure charges levied on airlines by the airport operator, say carriers.
The GMR-promoted Delhi International Airport Ltd (DIAL) raised the charges on Sunday, which has reignited an old fight between the airports and airlines over charges.
Interestingly, private airport operators, including GVK Power & Infrastructure-promoted Mumbai International Airport Ltd (MIAL), are backing DIAL, insisting that the hike is as per promised by the government in the concessionaire agreement.
The order will set up a precedent for similar such cases regarding the rival private airports. Airport Economic Regulatory Authority (Aera), a regulatory body, though allowing the increase initially for nine months until March 31, had sought comments from stakeholders in this regard.
DIAL has contended that the aeronautical charges fixed by the Aera for the second control period have fallen below the “Base Airport Charges (BAC)” stipulated in the State Support Agreement and therefore it is entitled to collect BAC plus permitted nominal increase of 10% thereon (BAC+10%). Aera was set up in May 2009, while the concession agreement between central government and DIAL was signed in 2006.
Federation of Indian Airlines, a lobby group representing Jet Airways, GoAir, IndiGo and SpiceJet, in its response to Aera said, “It is noteworthy that airlines and passengers must not be burdened with any tariff to be collected to fund the capital investments of a private operator”. National carrier Air India said that the excess amount of about Rs 5,200 crore collected by DIAL earlier should be adjusted against any hike and the airlines which were “burdened” with excess amount should be instead compensated in proportion to their contribution in the form of discounts in tariff.
The airlines claim that during the current phase of modernisation of Delhi and Mumbai airports, the operating costs of all the airlines have increased manifold, due to taxiing/holding time both on the ground and in the air, as a result of airport congestion, entry of new airlines and expansion of air services preceding enhancement of airport facilities.
The cost increase has been considerable in the area of fuel burn, aircraft and engine maintenance, besides cost of flight cancellation due to delayed arrivals, they said.
The airlines said that a hike in aeronautical tariff has already witnessed resulted in airlines, especially the low-cost ones, discontinuing their services. For example, Air Asia pulled out of Hyderabad airport last year in January when the airport increased its charges. Air Asia X announced withdrawal of its services from Delhi and Mumbai airport, citing a steep increase in costs. “With the proposed hike in BAC being implemented, Delhi airport will become the most expensive airport in Asia,” the airlines said.
While agreeing that a lot of expenditure has gone into developing and maintaining the airports after they were taken by the private operators, they said the government-owned Airport Authority of India (AAI) which is a stakeholder in these projects, should contribute in further investment or lower its stakes. AAI holds 26% stake each in DIAL and MIAL.
FORMATION FLYING
- The Delhi International Airport Ltd raised the charges on Sunday, which has reignited an old fight between the airports and airlines over charges
- Private airport operators are backng DIAL, insisting that the hike is as per promised by the government in the concessionaire agreement
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