Indian airports not as expensive as touted

For long airlines have been crying themselves hoarse about airport charges in India being amongst the highest in world.

The Association of Private Airports Operators (APAO) on Friday contested this claim, citing the latest survey report of aviation management consultancy Jacob Consulting, which says otherwise.

The report puts Mumbai’s Chhatrapati Shivaji International Airport at the 50th position in terms airport charges while other Indian airports like Delhi, Bangalore and Hyderabad do not even feature on its list of 50 most expensive airports of the world in 2008.

The consulting firm, which states the airport charges in special drawing right (SDR) currency, shows Mumbai airport’s rate in 2008 was 84% lower than Toronto airport, which had the highest airport fee in the world. Mumbai’s airport fee was SDR 9280 compared to Toronto’s SDR 59143 in 2008.

Airports collect fees from airlines for services offered on their premises that include handling passenger, parking, landing and route navigation.

Friday’s clarification has come in the wake of recent demand by the airlines to the government to slash airport charges so that they could reduce their mounting losses.
A senior executive at the Hyderabad airport said any reduction in the airport fee would adversely impact revenues of the airport, which were already tumbling due to declining air traffic movement (ATM).

“Our ATM in the domestic sector is down 12-15% while it’s up by 8% in the international sector. This drop in passengers passing through our airport has also brought down our non-aeronautical revenues from retail and other service,” he said.
The statement by APAO said that, despite a 48% aggregate inflation in the last eight months, airport charges were hiked by just 10% in February this year.

The association also disputed the claim that airport charges in India constitute a very high portion of an airline’s operating costs. “Airport charges in India constitute only about 3.25-3.5% of total operating cost of airlines as compared to ATF (aviation turbine fuel), which constitutes 40% of the costs,” it said.

The airport association body also said that, based on Naresh Chandra Committee’s suggestions, domestic airlines were also being offered a 15% discount on landing charges if they cleared dues within 15 days from the date of invoice.

Further, landing charges on aircrafts with seating capacity of less than 80 seats are exempted.

“Hence, airports continue to support airlines in these challenging times,” the APAO note said.

A senior executive said that even though airport charges of Indian airports were not among the highest, they were not in sync with the paying capacity of Indian flyers.
“Airports like Bangalore and Hyderabad have user development fee (UDF) of Rs 372 per passenger and Rs 260 per passenger, which are close to 10% of some fares at Rs 2000- 3000. They (airport charges) are not fixed keeping in mind the paying capacity of Indian passengers,” he said.

He also said that unlike in other countries airports were not ready to negotiation of airport charges. “In many countries, airlines can negotiate rates with airports based and on the traffic movement they (charges) can be lowered or raised, he added.