Airport charges may force up fares

New Delhi: Domestic airlines are preparing for an increase in air-fares, saying they may be forced to do so in anticipation of a steep 40 per cent rise in airport charges proposed by the authorities in Bangalore, Hyderabad, Delhi and Mumbai.
On long-haul routes to Bangalore and Hyderabad, new airports being built under public-private partnerships (PPP), the increase could be roughly Rs 1,000. In Delhi and Mumbai, which are being modernised under PPPs, the increase could be a smaller Rs 300 on similar routes because these airports do not charge development fees.
According to sources, Bangalore and Hyderabad are planning to impose a user development fee of around Rs 700 per ticket.
Airport charges, such as route navigation facility charges (RNFC), landing and parking fees, space rentals and ground-handling costs, account for 12 to13 per cent of an airline?s costs.
SpiceJet CCO Samyukth Sridharan said the proportion could rise to 15 per cent after the fee increases.
Airlines say that after being outsourced to the airport developer, ground-handling expenses are expected to increase almost three times from Rs 4,000 to Rs 5,000 per flight to between Rs 12,000 and Rs 15,000.
Industry sources said landing and parking charges at Mumbai and Delhi airport are also slated to increase 10 per cent this year.
13/02/08 Anirban Chowdhury/Business Standard

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Categories: airports Feb 2008, Indian Aviation- In General Feb 2008