The Andhra Pradesh High Court has ruled that the Rajiv Gandhi International Airport (RGIA) at Hyderabad, a subsidiary of GMR Infrastructure, can get back to levying user development fees.
The GMR Hyderabad International Airport Ltd (GHIAL), the company that built and operates the airport, had moved the high court challenging the decision of the Airports Economic Regulatory Authority (AERA) in scrapping the collection of the fees. GHIAL was charging R430 plus taxes for domestic passengers and R1,700 plus taxes for international ones.
“On October 6, 2015, the high court at Hyderabad has issued a ruling in favour of GHIAL which will now enable Hyderabad airport to collect tariff as was earlier collected,” a company statement said. However, pending approvals from AERA, GHIAL did not mention the amount or date from when the fee will be levied.
AERA had directed the company to scrap the fee for two years from April 1, 2014 till March 31, 2016. In June 2015, the civil aviation ministry had directed AERA to adopt a hybrid model with a 30% cross-subsidisation for tariff determination at the Hyderabad airport. Under the hybrid model, the airport operator adds a part of the non-aeronautical (duty-free shops, hotel, restaurant, among others) revenue and the aeronautical revenue (landing, parking and ground handling charges) to compile the total earnings.
“Pursuant to the policy direction by the ministry of civil aviation to adopt hybrid till model with 30% cross-subsidisation for Hyderabad Airport and pending compliance, GMR Hyderabad International Airport Ltd had filed a writ petition with the high court at Hyderabad seeking approval to collect tariff/airport charges as was being collected prior to 1 April 2014,” the company said in a statement to BSE.
GHIAL is a joint venture company promoted by the GMR Group (63%) in partnership with the Union government (13%), the government of Telangana (13%) and Malaysia Airports Holdings (11%). The passenger traffic at the Hyderabad airport recently crossed 10 million per year and handled more than 100,000 tonne of freight volume in FY 14-15.