Sunday, October 24, 2021

India high cost environment for airlines; critical that AERA is empowered further: IATA official

India continues to remain a high cost environment for airlines to operate in and it is critical to empower the Airports Economic Regulatory Authority (AERA) further to safeguard the interest of passengers, said Philip Goh, Regional Vice President for Asia Pacific of global airlines body IATA.

AERA decides what tariffs -- such as base airport charges, landing charges, parking charges and passenger service fee -- can major Indian airports charge an airline or a passenger for a particular period after considering the airports' expenditure and revenue projections for that period.

Goh told PTI in a statement last week, "Over the past year, with the third control period tariff reviews for India's major airports, AERA has demonstrated its effectiveness as an independent regulator."

"At a time when the government is planning on a big thrust on monetisation of airport assets under its National Monetisation Pipeline, it is critical that AERA is empowered further to safeguard the consumer interest," he added.

Since the beginning of the pandemic in February last year, AERA has rejected the demands of operators of major airports such as Delhi and Mumbai for a major increase in tariffs for third control period, which began on April 2019 and ends on March 2024.

For example, AERA had in December 2020 rejected the Delhi airport operator DIAL's demand to increase base airport charges by 424 per cent.

Similarly, AERA had in February 2021 rejected Mumbai airport operator MIAL's demand to impose an ad-hoc user development fee (UDF) of Rs 200 on domestic outbound passenger and Rs 500 on international outbound passenger.

If the demand for ad-hoc UDF at the Mumbai airport was permitted, it would be unfair and an additional burden to passengers who should instead be getting the benefit of "reduced tariff" as they have "already overpaid in the prior years", the AERA order had said.

Last month, AERA had issued an order stating that the UDF at the Bengaluru airport will remain unchanged till March 2022 and will be increased every financial year from April 2022 to March 2025.

In reaction, Bengaluru airport operator BIAL had expressed its disappointment stating that the AERA order was likely to be "seriously inadequate to meet our cash flow requirements and will also pose a challenge when it comes to meeting our operational expenses".

24/10/21 PTI/Moneycontrol

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