Airports Authority of India may levy landing fees on more airlines

The Airports Authority of India (AAI), a body that owns and operates most airports across the country, plans to levy landing fees on some aircraft which have been exempt from such a charge till now. This move, if cleared, will help the beleaguered Authority to improve its revenues even as it hurts some airlines at select routes.

But at the same time, the Airport Regulator wants to soften the blow for airlines at two of the largest airports in India-Mumbai and Delhi-by refusing a proposal of increasing airport charges at these two locations by 10% each.

AAI has proposed charging landing fees from aircrafts having seating capacity of less than 80 passengers and being operated by scheduled domestic operators. Such aircraft have been exempt from landing and parking charges at Indian airports till now. Giving this information in Lok Sabha on Thursday, Civil Aviation minister, Praful Patel said he has asked AAI to commission a study and get a clearer picture on this proposal.

The waiver of landing charges for 80-seaters and  other concessions in Route Navigational Facility Charges (RNFC), 15% reduction in landing charges for domestic  flights etc. were allowed by AAI from 2004 at all airports.

Meanwhile, the Airports Economic Regulatory Authority (AERA) appears to be batting for embattled airlines. In a consultation paper posted on its website, the Authority has rejected demands by both, Mumbai and Delhi International Airports, to raise base airport charges by 10%. If these charges are implemented after the consultation process is over, airlines will have to shell out more for using airport facilities and therefore suffer further margin erosion.

AERA has justified rejection of MIAL and DIAL demands by saying that even though there is a provision in their respective concession agreements to hike airport charges by 10% on the commencement of the fourth year, it is subject to the approval and hence cannot be construed as an automatic hike. AERA has also pointed out that development works at neither airport have been completed on schedule. The two airports-DIAL promoted by a consortium led by the GMR Group and MIAL by a GVK-led consortium-sought 10% hike in aeronautical levies from the 2006 levels with retrospective effect from May 2009.

As per the state support agreement, the airport charges could be hiked by 10% in case the concessionaire completes and commissions all the mandated facilities in the first two years of operation.

The ministry of civil aviation had earlier allowed both DIAL and MIAL to hike charges by 10% upon the completion of two years, even though they had failed to complete the mandated projects within the stipulated time.