Operators, airlines spar over airport charges

Mumbai: Airports and airlines in the country are battling over what model the Airports Economic Regulatory Authority, or Aera, should adopt for fixing airport charges that airlines must pay.
Airport operators prefer the so-called double-till model, in which aeronautical and commercial revenue, such as shopping at the airport, are lumped together, while airlines say the single-till model, in which purely aeronautical, or flying-related, activities are considered, should be adopted.
Airlines say airport charges based on the single-till model are likely to be lower and will result in cheaper tickets for fliers. Airport operators, and investors in airports, insist that the double-till will enhance return on investment.
The decision on a pricing model is critical because it will decide how much passengers will have to pay, said a consultant with a global consulting firm, who did not want to be identified as he is not authorized to speak to the media. Currently, passengers pay user development and airport development fees; the latter is a levy for future facilities being built at airports.
“If airports are allowed to levy dual-till, flying will be more costly and footfall at airports will be impacted,” added this person.
The two schools of thought are evident in comments sought to a white paper that audit and consulting firm PricewaterhouseCoopers Pvt. Ltd (PwC) has prepared, on behalf of the government, to formalize the structuring and operational procedures at Aera.
15/02/10 PR Sanjai/Live Mint

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Categories: Airports Feb 2010