Thursday, October 01, 2020

Govt hikes air navigation charges by 4%, airlines demand roll back

 Mumbai: Air Navigation Service (ANS) charges or fees for radar and air traffic control services have been hiked by 3.5-4 per cent bringing relief to Airport Authority of India (AAI). Airlines will have to absorb the higher cost as there is no room for increasing fares at present.

On Wednesday, Director General of Civil Aviation Arun Kumar notified the decision after the government approved AAI's long pending demand for an increase in the levy. The navigation charges collected at present were approved in early 2000. A hike in charges in 2017 was rolled back because of opposition from airlines.

ANS charges contributed around Rs 3,500 crore, nearly a quarter of AAI's revenue in FY2020. However, these account for 3-4 per cent of operating expenses of airlines in India. A senior aviation industry executive said airlines will have to absorb the ANS rate hike as demand for travel remains subdued. Only lowest priced tickets are being sold and there is no room for an increase in fares, he added.

"The sudden increase in India’s air navigation services (ANS) charges is disappointing, especially since it is being done with just a day’s notice and when the global aviation industry is facing the biggest crisis in its history. Furthermore, implementing a differential increase in charges for domestic and international airlines goes against International Civil Aviation Organisation's principles that call for charges to be 'equitable' and 'non-discriminatory', said an International Air Transport Association (IATA) spokesperson.

IATA has urged the civil aviation ministry to reverse the decision and work with the industry on a business recovery plan.

01/10/20 Aneesh Phadnis/Business Standard

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