Wednesday, October 21, 2020

Flying out of Mumbai airport set to get costlier

New Delhi: The Mumbai International Airport Ltd (MIAL) has proposed levying an ad-hoc user development fee (UDF) of Rs 200 and Rs 500 for every domestic and international outbound passenger, respectively, till March 31, 2023, to tide over the Covid crisis. It has informed the Airports Economic Regulatory Authority (AERA) about a “cash shortfall for meeting operational expenses” due to extremely low levels of air traffic in pandemic times that has resulted in loss of both aeronautical and non-aero revenues. The ad-hoc levy has been sought to “ensure economic and viable operations of (the) airport”.

The ad-hoc UDF proposed for every departing domestic passenger, which is currently nil at Mumbai, is Rs 200. For every international departure, MIAL has proposed Rs 500 as ad-hoc UDF — taking the total UDF (adding UDF of Rs 116) to Rs 616. For international tickets issued in foreign currency, the ad-hoc proposed for every departing passenger is $7.23 in addition to UDF of $1.68, taking the total to $8.91 (with assumed exchange rate of Rs 69.11 for USD).

AERA, in turn, has sought stakeholder comments on MIAL’s annual tariff plan for the third control period of April 1, 2019, to March 31, 2024, that includes proposal for this ad-hoc UDF. The regulator will take a call on this issue, including whether the ad-hoc UDF should be allowed and if yes how much, after considering the same.

All airports — the PPP ones in Delhi, Mumbai, Hyderabad, Bengaluru and Kochi; with Ahmedabad, Lucknow and Mangaluru getting added to this list by November 12 when Adani Group has to take over; and those run by the state-run Airports Authority of India (AAI) — are facing a similar drying up of revenues due to the pandemic. At the same time operational expenses due to enhanced sanitisation measure and PPEs have gone up. It may be a matter of time where these airports, at least the PPP ones, seek a similar ad-hoc levy like MIAL.

AAI chairman Arvind Singh had said earlier this month that the PSU’s “revenue was down by 80% in April-June, 2020, quarter over same period last fiscal. It is yet to cross 50% mark of revenue of last year and had to take working capital loan.”

About the proposed ad-hoc UDF, MIAL CEO R K Jain has said in a letter to AERA on October 15, 2020: “If (this) payment is made within 15 days from receipt of bills, collection charge of Rs 2.5 per departing passenger shall be paid by (MIAL) to collecting airline. No collection charge in case to be paid if airline fails to pay within 15 days or in case of part payment. To be eligible to claim collection charges, the airline should have no overdue on any account with the airport operator.”

21/10/20 Saurabh Sinha/Times of India

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