The Board of Airlines (BOA) representatives, having a membership of around 40 airlines, will soon hold a crucial meeting to chalk out a common strategy to deal with the hefty hike of 344 per cent in airport charges which has already made major airlines re-work the investment plans and strategy towards India, a move that could impact Delhi’s chances of emerging as an aviation hub.
About 10 airlines have already filed a petition in the Delhi High Court against the steep hike in airport charges and the BOA meeting is being held to enlist the support of other airlines in an effort to bring them together on a single platform to contest this “arbitrary and unjust” hike in charges. Lufthansa group airlines (including Austrian and Swiss International), Air France, KLM, United and Virgin are part of the petition. These airlines carry about 30 per cent of the outbound traffic from India.
On the issue of hiked up charges, Christopher Fordyce, Regional Commercial Manager (South Asia) – British Airways PLC, said: “In an already difficult economic environment for airlines any increase in costs will have a direct impact on future growth. Such an exceptional increase in operating costs will make it difficult for airlines to invest in their network and services in India. British Airways constantly reviews its operations across the world to ensure that operating on any route makes viable business sense, and increasing costs to such levels will bring India into sharp focus.”
Lufthansa Director (South Asia) Axel Hilgers termed the hike in charges as unreasonable and unacceptable. “A normal hike according to inflation index is fine but such a massive hike is unacceptable. It is too much and burns us to the utmost limit. The BOA will be meeting this month to work on a strategy,” he remarked.
Asked if Lufthansa will pull out of India, Mr. Hilgers said at present the airline has no such plan but would need to fight it out. “Today it is Delhi and tomorrow it will be Mumbai where a similar problem could crop up. This could kill Delhi’s plan to become an aviation hub. The airlines will be forced to re-work their strategy and look for other options in the Gulf countries, South-East Asia or even Istanbul which is also emerging as a contender on this front,” he said.
International Air Travel Association Director-General and CEO Tony Tyler had also slammed the hike in airport charges stating that they were clearly unacceptable. “The Delhi International Airport Limited (DIAL) has to pay 46 per cent of its revenue to the government which was neither in the interest of the airlines nor the airport,” he had said recently in New Delhi.
Justifying the hike, a DIAL spokesperson said: “DIAL has invested heavily in the improvement of existing infrastructure and the creation of new ones at IGIA. This investment is now being offered a limited, regulated return by the competent authority as per our concession agreement. We do not feel the charges have any bearing on the airport’s long-term success.”
“Regarding an impact of the tariffs on Delhi’s prospects as a hub, the argument is redundant as the IGIA levies ‘no charges’ on transit passengers,” the spokesperson concluded.
