Airlines may be crying foul over steep airport charges, but airport operators fail to see what the noise is all about.
Operators say charges for airlines have not been increased since 2001
NEW DELHI: Airlines may be crying foul over steep airport charges, but airport operators fail to see what the noise is all about.
Airport charges generally include landing and parking fees for aircraft, besides ground-handling levies, and are decided by the Airports Authority of India. Surprisingly, all these levies have remained constant for the last seven years.
The only thing that has changed is the user development fee (UDF), which the government permitted greenfield airports at Hyderabad and Bangalore, but only from international passengers.
For all remaining airports, revenue generation happens only through landing, parking and ground-handling charges, which continue to languish at 2001 levels.
According to a Mumbai International Airport (MIAL) spokesperson, the concession agreement signed by GVK with the government allows the operator to hike landing and parking fees by 10% after two years of operation. But this suggestion too was turned down by the government, keeping in mind the precarious financial health of airlines. The spokesperson for the new airport at Hyderabad says the agreement with GMR allows for an up to 38% increase in airport charges over a period but “as on date, charges prevalent at Begumpet apply to Shamsabad and there has been no increase”.
According to back-of-the-envelope calculations, the average landing charge per domestic flight at Mumbai was Rs 12,300 last year (for international flights the average figure was Rs 56,000). This translates to Rs 117 as the average yield per embarked domestic passenger for GVK last year against Rs 387 from every international passenger.
“Airlines anyway charge all of this to the consumer. The levy is really insignificant when we look at the overall cost structure of carriers. Aviation turbine fuel (ATF) accounts for the biggest cost head, followed by staff costs…..airport charges are not so significant for an airline’s bottomline as they are being made out,” said an industry veteran.
Even ground handling charges at airports such as Hyderabad are under the airlines’ control since they are doing all the ground handling for domestic passengers themselves, pointed out another airport developer.
As far as UDF is concerned, international passengers are charged Rs 1,000 at Hyderabad and Bangalore.
b_sindhu@dnaindia.net
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