Airports regulator to get more teeth, nationwide jurisdiction

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New Delhi, Aug 29: The Cabinet on Friday cleared 11 amendments to the Airport Economic Regulatory Authority (Aera) Bill, giving more teeth and a wider sweep to the regulator.

The Bill gives the regulator powers to determine charges for all airport related activities across the country and to slap penalties for non-compliance.

Of the 11 amendments made to the original Bill— which was cleared in April this year—the ministry of civil aviation considers five to be very significant.

These include the enhancement of the regulator’s power to decide whether or not airport operators can use other charges to cross-subsidise aeronautical charges. While core service charges like landing, parking, communication, navigation and air traffic control were the monopoly of the airport operator, non-core services like office space, car parking and food, among others, denote non-aeronautical services.

The Cabinet has also included cargo and ground handling in the ambit of the regulator. A civil aviation ministry statement issued after the Cabinet meet said this was done as these services have a monopolistic nature. The fuel supply infrastructure at airports has also been brought under Aera’s purview.

The regulator will now cover all airports across the country irrespective of their size or ownership. Earlier Aera’s purview was restricted to airports with a capacity of more than 1.5 million passengers, which meant just the 11 major airports. These airports generate 85% of the revenue and passenger traffic in the country while the balance 78 operational airports handle less than 15% of the passenger traffic.

The Bill proposes a fine of up to Rs 1 lakh for non-compliance, with a provision to double it for subsequent offences.

According to analysts, these changes have given Aera powers on a par with the Telecom Regulatory Authority of India that will set quality standards and ensure a level-playing field for all airport operators, including those in the private sector. Aera is also expected to monitor pre-set performance standards at all airports.

The draft Bill proposes that the authority would determine the tariff structure for aeronautical services, including capital expenditure, and timely investment in improving airport facilities. The regulator would also determine the amount of development fees for major airports. The draft says that the authority would comprise a chairperson and two others, to be appointed by the government.