DIAL insists on 774% hike in airport charges

Written by fe Bureau | New Delhi | Updated: Feb 29 2012, 07:12am hrs
A day before the final submission of stakeholders' views on determining airport tariff, the Delhi International Airport (DIAL) reiterated its stand on seeking an increase of 774% in the airport charges.

The company chief finance officer (CFO) Sidharth Kapur on Tuesday said that the hike would cause only 100-150% increase in the overall aeronautical charges of airlines and that would not be too much considering that Delhi and Mumbai among the airports with lowest charges.

While the private airport developer has sought a 775% hike in airport charges, Airports Economic Regulatory Authority (AERA) has suggested that it should be increased only by 334%.

The hike of 774%, if approved, would also mean more revenues for the Airports Authority of India (AAI), which gets 46% of the total revenue earned by the private airport operator.

The stakeholders including DIAL, Mumbai International Airports, the representatives of various airlines had met last month also to finalise the increase. However, no consensus could be reached.

DIALs demand to hike airport charges has drawn a lot of opposition from IATA (International Air Transport Association), airline like Lufthansa, Air France, British Airways, Emirates and Cathay Pacific, which feel that the even the 334% increase as proposed by the AERA can not be absorbed by the market as the airlines across the world are in financial crisis.

Kapur said, the demand for such a hike in aeronautical charges was not to earn supernormal profits ... These are reasonable charges as these have not been increased in the last ten years, except once by 10% in 2009.

The airport developer has also got some support from industry experts who feel that though "the 774% sounds big, the actual increase would be only by around R 500-600 per seat.

DIAL has been pushing for airports charges hike to recover its losses and carry its expansion plans. The company had incurred a loss of R1,300 crore since 2006.