At one level, it seems appropriate that passengers using a better quality airport should pay for the upgrade. At the same time, for years, the same passengers have been paying a passenger service fee on domestic flights for a service that distinguished itself by its non-existence. The reported plans to hike the charges, in part to recover the capital expenditures made to turn the usage experience tolerable, seems unfair and ad hoc. The worse off an airport is, the higher the capital cost incurred in refurbishing it, presumably. Does it then stand to reason that passengers?who have no say in decisions to renovate airports?should pay according to a graded schedule of escalating costs, airport by airport? What if one of these decides to go from scrapyard discomfort to five-star luxury and charges accordingly? Surely, this would be absurd. This issue assumes pressing relevance because airports in India remain city monopolies, and passengers cannot opt for a cheaper (or, for that matter, better) way to board a plane. At least on a toll road, a traveller can choose a free-to-use alternative.
Infrastructure upgradation is always a tricky issue in a country of such disparities in affordability levels. It doesn?t help that cost-revenue calculations prove widely off-the-mark in so many cases, and revenue-sharing models often have to be reworked. In the case of the upgrades of Delhi and Mumbai airports, carried out by private companies that won the bids to operate them in alliance with AAI, the revenue share models factor in a 46% share for the latter. This is stiff for the private operator, and given the compulsions of electoral politics, the civil aviation ministry would not have had the leeway to revise the terms in favour of the private partners. But the stiff conditions in themselves create an incentive for them to blunt the impact, which explains the plan to hike charges. Note that the concession agreements signed between the two parties did not contain any such clause. All this is reminiscent of the telecom sector?s woes before 1999. The license agreement between the government and telecom operators turned out to be a little too tough for the latter to honour, and the entire deal had to be revised. At a time when more than 35 airports are on the signing table for modernisation, those lessons should not be forgotten.
