Friday, September 21, 2018

'New tariff model risky for greenfield airport developers'

Mumbai: The draft airport policy that seeks to shift tariff structure to the 'price cap' model from the existing 'cost plus' model exposes developers to traffic risks in general and is particularly risky for greenfield airports, a report warned Thursday.

The proposed changes in the approach towards greenfield airports to 'dual till' from the earlier '30 per cent hybrid till' leaves the entire non-aero revenues outside the ambit of price cap, which to an extent is a positive, India Ratings said in its report.

The draft policy also defines clearly aero and non- aero revenues, including clarity on the inclusion of cargo revenues under the aero banner. Of the four large private airports, historically there were significant delays in fixing tariffs for control periods.

"Despite strong passenger traffic growth, introduction of traffic risks and limited flexibility on tariff revisions combined with restrictions on real estate area amplify the risk for a greenfield airport," warned the report.
21/09/18 PTI/ZeeBiz
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