Airport tariff regulator hikes Bangalore airport charges; IATA opposes the move

Press Trust of India Posted online: Monday, Jun 16, 2014 at 0000 hrs
New Delhi : Airport tariff regulator AERA has fixed Rs 1,368 and Rs 342 per international and domestic passenger as user development fee (UDF) and other charges for Bangalore's Kempegowda airport but the airlines have opposed the "over 100 per cent" hike in tariff.

In a latest order, the Airports Economic Regulatory Authority (AERA) also fixed charges for aircraft landing, parking, housing and other charges from July 1 till March 31 next year and higher tariff rates from April 1, 2015 till March end 2016.

While only UDF levels were lowered for 2015-16 to Rs1,226 for embarking international passengers and Rs 306 for domestic passengers, all the other tariffs were hiked for this period.

Terming the move as "a double whammy to Indian aviation", IATA's Regional Vice President (Asia Pacific) Conrad Clifford said in a statement that international airlines operating to Bangalore would now face "a steep increase in their operating costs with a 145 per cent increase in landing charges and a 105 per cent increase in parking charges".

The official of the global airlines body said it was also "disappointing" that AERA "deviated from the single till approach" in the case of Kempegowda International Airport which was "contrary to what AERA had previously opined that the single till approach was most appropriate for India".

"This deviation in policy can increase costs for airlines and passengers, thus negatively impacting traffic. This will hurt an already fragile Indian aviation industry," Clifford said, adding that funding airport development was "not a valid justification to deviate from the single till approach."

Under the 'single till' principle, airport activities, both aeronautical and commercial, are taken into consideration to determine the level of airport charges. By contrast, only aeronautical activities are taken into consideration under the dual till principle.

Maintaining that funding of the airport could be done through other means like equity, loans and bonds, Clifford said: "Instead, airport users are being penalised by being a convenient source of funding. They are unfairly made to pay for facilities that have yet to be built."

The International Air Transport Association (IATA) has been stressing that aviation should be treated as a strategic national asset that would pay dividends to the Indian economy.

Aviation supports 8.8 million Indian jobs and underpins 1.5 per cent of GDP, as per IATA figures.

"This could be a lot more. And the more globally connected that India is, the more opportunities will be created for jobs, trade and inward investment. AERA's decision is a step backwards for Indian aviation," the IATA officer said from Singapore.