AAI plans to up passenger fee

The Airports Authority of India (AAI) is planning to move a proposal seeking a substantial hike in passenger service fee (PSF), according to a source familiar with the development.

PSF forms a part of every airline ticket and goes to the government’s coffers for providing security and passenger facilitation services.The quantum of increase to be proposed is not known yet.

Currently, the government earns Rs 225 from every Indian air passenger. About Rs 140 of this is used for providing security cover across airports and the remaining goes for passenger facilitation such as air conditioning, upkeep of toilets, trolleys etc.

Greenfield private airports at Hyderabad and Bangalore have begun charging a hefty ‘development fee’ of Rs 375 per departing domestic passenger and Rs 1,000 for international passengers.AAI manages 125 airports, only 15 of which are making profits. So the authority is looking for ways to enhance revenue.

A senior AAI official said the authority was planning to approach the government for hiking the passenger facilitation component substantially. “PSF was devised when air traffic was at a fraction of what it is at present. The number of passengers has swelled but we do not generate enough revenues to provide basic facilities to them…. We may ask the government to double the passenger facilitation component in PSF for some AAI owned airports.”

Already, the government is examining a proposal to allow development fee on the lines of Hyderabad airport for Jaipur airport. Turn to Page 24The official confirmed that the development fee proposal has already been submitted to the newly formed Airport Economic Regulatory Authority (Aera).

He also made it clear that passengers will either have to pay development fee or an increased passenger service fee on their tickets —- both levies would not be charged simultaneously.

Though Aera has been set up to mediate on any economic disputes across airports, the official made it clear that only cases pertaining to airports where the annual passenger traffic is more than 1.5 million would be heard by the authority. So, only the seven biggest AAI airports would fall under Aera’s jurisdiction, besides 5 other airports.

The AAI official pointed out that city side development of non-metro airports, charging DF on some airports and accruing revenue from Delhi and Mumbai airports (two of the largest in the country where AAI has a revenue sharing arrangement with respective consortia partners) were some of the ways through which the AAI was planning to raise total revenue.