Wednesday, September 14, 2022

Airlines oppose fee hike by Mangaluru Airport

Airlines have opposed Adani-owned Mangaluru airport’s proposal to increase user fees, saying that it would impact their recovery from the damage caused by the pandemic.

The Federation of Indian Airlines (FIA), which includes IndiGo, SpiceJet and Go First, suggested that instead the airport increase its revenue from non-aeronautical sources and cross-subsidise passenger fee, and landing and parking charges for airlines. According to the tariff model, 30% of non-aero revenue is used to cross-subsidise and lower the charges on passengers and airlines.

Tariff regulator Airports Economic Regulatory Authority of India (AERA) also asked the airport operator to take efforts to substantially increase the non-aero revenue, which includes income from sources like duty-free shops, restaurants, lounges and car parking.

The Mangaluru airport has sought an immediate increase of 49-74% increase in passenger, landing and parking fees for the next five-year period, in order to fund development activities. It has also requested permission to levy the user fee on both arriving and departing passengers — it is usually not levied on arriving passengers.

An Adani spokesperson didn’t comment on the issue.

A person aware of the development said Mangaluru had limited scope for increasing non-aero revenue and currently the airport developer was concentrating more on improving infrastructure and safety conditions at the airport. Adani Airports Holdings took over operations of the airport in Karnataka in November 2020.

The airport in its projection to the tariff regulating authority said that its non-aeronautical charges for the period from April 1, 2021 to March 31, 2026 would be Rs 40.34 crore.

14/09/22 Arindam Majumder/Economic Times

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