No policy direction has been given to the Airports Economic Regulatory Authority of India (AERA) by the Centre for switching to hybrid-till model of determining tariff at Airport Authority of India (AAI) airports, according to the International Air Transport Association (IATA).
Policy mention
IATA said the National Civil Aviation Policy (NCAP) 2016 had specifically mentioned that AERA may adopt the hybrid-till model for determining tariff at airports developed by state governments, private sector or in public-private partnership (PPP) mode. “It clearly excludes the AAI airports, which is addressed independently in the following section,” said IATA.
“If AERA decides to deviate from its regulatory philosophy solely with the objective of bringing alignment with the NCAP, then such deviation could of course only be applied to those airports specifically covered under Section 12 of the NCAP viz airports developed by State governments, private sector or in PPP mode,” IATA said in its submission to AERA, which has sought stakeholders’ view to adopt a hybrid-till approach for calculating airport fees.
Currently, AERA has a single-till model in place to determine aeronautical charges at 20 major airports across the country, including Kolkata and Chennai. The airports at Delhi, Mumbai, Bengaluru and Hyderabad follow a shared-till model. Under the single-till model, both aeronautical and non-aeronautical revenues are taken into account to calculate passenger fee.
AERA wants to switch to the hybrid-till model under which 30 per cent of the airport operator’s non-aeronautical revenue would be used to subsidise airport costs in a bid to align its tariff determination model with the NCAP.
Opposing the hybrid-till model, the Federation of Indian Airlines (FIA) said in its official views that AERA had “failed to discharge its duty and function as a statutory regulatory by proposing to adopt the hybrid-till approach without any cogent reason or evidence in support of the same.”
The domestic airlines argued that the regulator was not bound by the NCAP to change its tariff policies unless a directive is issued by the civil aviation ministry under Section 42 of the AERA Act of 2008. However, airport body Association of Private Airport Operators (APAO) fully supported AERA’s move and urged it to “implement this at the earliest.”
