Airlines to benefit from new airport tariff model

After mulling over the issue for nearly a year, the Airports Economic Regulatory Authority of India (Aera) has adopted the single-till model, also followed at airports such as the UK's Heathrow and Gatwick.
The airport tariff regulator has decided that all major airports except New Delhi and Mumbai will charge clients under a model that potentially benefits airlines and passengers. Under the so-called singletill model, airport charges are fixed by taking into account all principal airport activities, including aeronautical or flyingrelated activities and non-aeronautical activities such as commercial use of airport space. The dual-till model, on the other hand, considers only aeronautical activities. Airlines prefer the single-till model as airport charges, being drawn from a larger number of sources, are likely to be lower for them. This also translates into lesser cost for passengers. After mulling over the issue for nearly a year, the Airports Economic Regulatory Authority of India (Aera) has adopted the single-till model, also followed at airports such as the UK's Heathrow and Gatwick. "The authority is of the opinion that single-till is most appropriate for the economic regulation of major airports in India," Aera secretary Sandeep Prakash said in a 12 January order.
On 11 March 2010, Mint reported that Aera had tentatively opted for the single-till model, while awaiting the inputs of stakeholders. The regulator itself hired PricewaterhouseCoopers Pvt. Ltd to ascertain which model was better. The consulting firm reported in favour of singletill. BridgeLink Capital Advisors, commissioned by the aviation ministry, agreed with the assessment. However, KPMG India Pvt. Ltd, hired by private airport operators, said dual-till was the better option.
17/01/11 Mint/India Infoline

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Categories: Airports Jan 2011, Indian Aviation- In General Jan 2011