DIAL may deny space to Air India at discount rate

New Delhi: Delhi International Airport (DIAL) said it would deny space to the national flag carrier Air India at its upcoming new terminal unless the airline drops its demand for a discounted rent.
The GMR group-led consortium, which is modernising the Delhi Airport, has indicated to civil aviation ministry that a single rate of space rental will be applicable to all airlines, a senior government official told ET.
A higher rental at the expensive Delhi Airport could further undermine the finances of the beleaguered state-owned airline and its efforts to cut costs. Air India pays a lower rental at Indira Gandhi International Airport operated by Delhi International Airport (DIAL), a joint venture consortium of GMR Group (54%), Airports Authority of India (26%) and Fraport & Eraman Malaysia (10% each). While DIAL is asking AI to pay the same rent similar to other private carriers at the upcoming terminal T3, the airline is insisting on the discounted rate fixed by what is called the Brahma Award in the aviation circles. The then financial advisor in the ministry of civil aviation PK Brahma had fixed a special space rental for the national carrier while adjudicating a dispute between Airports Authority of India and the airline.
DIAL charges Rs 1,950 per square metre per annum from airlines for the space at terminal building. The national carrier, however, pays only about Rs 300 per sq m. The airline owes about Rs 65 crore to the Delhi airport operator.
Faced with funds constraints, DIAL has already levied a user-fee on fliers to fund the modernisation of the airport. A higher market-based levy on AI, which has a fleet of 132 aircraft, would increase the airport’s aeronautical revenues.
16/11/09 Nirbhay Kumar/Economic Times

To Read the News in full at Source, Click the Headline

Categories: Airports Nov 2009, NACIL Nov 2009