AAI freezes airport charges to help airlines tide over crisis

New Delhi: The Airports Authority of India (AAI) will not rub salt into the wounds of a financially-troubled aviation sector. It has decided to freeze all kinds of charges on passengers and airlines until the situation improves or ATF prices dip.
Aero services provided by AAI forms 15% of the total operating costs of airlines and is the third-largest component after ATF and wage bill, which account for 40% and 30%, respectively. AAI provides passenger, terminal and aerodrome facilities at the airports, along with parking, landing and air navigational services to domestic and international airlines. AAI’s charges include the Rs 225 passenger service fee on each ticket and parking and landing charges as per the weight of the aircraft.
AAI chairman K Ramalingam told ET: “..Despite big plans to spend Rs 10,000 crore to improve infrastructure and modernisation of various airports, we will maintain the prevailing rates so as to cushion the rising input costs for airlines.”
The fixed rates will be applicable to Delhi and Mumbai airports too, which are currently being modernised by private players. Private airport developers —Delhi and Mumbai — had asked for a 10% hike in aero charges this year.
While AAI’s decision has come as a relief for the airlines, they are proposing various moves to increase revenue and fight rising ATF prices, which have almost doubled to Rs 60,468 per kilolitre now from April 2005 . The situation has become alarming enough for airlines to go beyond cutting flights with poor passenger load and postponing fleet acquisition plans.
30/05/08 Chanchal Pal Chauhan/Economic Times

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Categories: Airports May 2008