AAI fears fare hike will further reduce traffic, erode revenue

Chennai: The hike in domestic air fares announced this week has come as a blow to airports which are already reeling under the impact of dwindling domestic and international passenger traffic.
Sources said Jet Airways and Kingfisher Airlines' decision to hike fuel surcharge would only discourage passengers from flying. "The situation is getting worse by the day. If other airlines also follow suit, domestic passenger traffic will further dip in June," said a senior official of Airports Authority of India (AAI).
Privatisation of high-revenue yielding airports at Delhi, Mumbai, Bangalore and Hyderabad have eroded the finances of the AAI, which depends on fees levied on airlines for revenue.
Now only two major airports remain under AAI Chennai and Kolkata and even here, passenger and cargo movement is on a decline. In addition to this, airlines always defer payment of air traffic fees.
Hence, the hike in fares that might further reduce passenger traffic is seen as detrimental for AAI which is struggling to find money to complete airport expansion projects at Chennai (Rs 2,000 crore) and Kolkata (Rs 1,800 crore).
Compared to the corresponding period last year, domestic passenger traffic in Chennai decreased by 15% while the number of departing passengers dipped by 18% in April 2009. Consequently, several commercial establishments have notified that they would be closing down their shops in the international and domestic terminals.
The scene was no better last year. While Chennai airport saw a 7% increase in international passenger traffic from 34.1 lakh passengers in 2007-08 to 36.63 lakh in 2008-09, the domestic passenger traffic declined 15% from 72.47 lakh in 2007-08 to 61.79 lakh last year, according to the statistics compiled by AAI.
20/06/09 V Ayyappan/Times of India

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Categories: Airports Jun 2009