Fresh airport tariff structure in August

Hyderabad: The airport regulator expects a formula for determining tariffs that can be levied at the airports to be ready next month and made effective in August.
“We plan to complete the consultation process and roll out the new tariff structure by August or so,” Yashwant Bhave, chairman,Airport Economic Regulatory Authority (AERA) said.
“We will follow capital-asset pricing model to determine the tariff so that the return on investment for airport operators will be commensurate with the risk,” he said on the sidelines of an aviation security summit organised by GMR.
The capital-asset pricing model would take into account parameters specific to each airport to set tariff, he said.
It would also take into account the viability of each airport based on the quality of services they offer and the concession agreements they signed with the respective state governments.
The regulator is learnt to be keen on excluding the cost of the land while crunching the numbers since the inclusion of land value in operational costs would only peg the tariff at higher levels imposing significant burden on the passengers.
For instance, airports operated by private entities like GMR and GVK have been taking the land value too while assessing the viability of the airports. However, the land banks that are available with the airports are also being simultaneously monetised for improving the revenues. Exclusion of the land value is believed to be the right model for identifying the tariff structure to be passed onto the passengers.
28/03/11 KV Ramana/Daily News & Analysis

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

Categories: Airports Mar 2011