Monday, July 03, 2017

Small airports keep tariffs low to stay competitive

Mumbai: While some major airports like Mumbai and Delhi have in past asked for high airport user taxes/tariff citing cost overruns and increasing expenditure, some of the smaller airports like Chandigarh and Trivandrum have gone for lower user taxes despite being allowed higher price cap by the Airports Economic Regulatory Authority of India (Aera).

The reason: these smaller airports believe that they will lose the advantage to major metro airports if they increase the price.

According to S Machendranathan, chairperson, Airports Economic Regulatory Authority of India (Aera), there have been instances where airports have kept the taxes/charges lower than the cap to remain competitive or for passenger convenience.

Aera determines the aeronautical tariffs for services provided at major airports, including landing, parking and housing of aircraft, as well as the user development fee.

Giving an example, Machendranathan said Chandigarh airport was given a higher cap for the airport user tax. “But the management decided against applying it as that would have made them less attractive as against the Delhi airport which is not very far away,”
03/07/17 Shahkar Abidi/DNA