The Airports Economic Regulatory Authority is considering the GMR group-led Delhi International Airport Limited's proposal for increase in landing and parking tariffs at Indira Gandhi International Airport here.
“Charges at the airport have remained the same since 2001. We were eligible for a one-time hike in 2009, but there was no effective increase in tariffs then,” said DIAL chief financial officer Sidharath Kapur.
The regulatory authority is considering the proposal by DIAL and is likely to come out with a final decision by next year. DIAL has reported loss of revenue in the past. DIAL is optimistic that AERA will pass the final order “soon”.
If the tariff increase becomes effective next year, DIAL hopes to report a “small profit” by the end of financial year 2012-13.
According to Mr. Kapur, the traffic at Delhi airport has increased four times in the past ten years with no effective increase in tariffs. He said a recent study conducted by aviation consultant Jacobs Consultancy showed that the “Delhi airport has the lowest tariffs and the lowest reported revenue compared to airports with comparable infrastructure worldwide”.
The increase in tariffs would mean additional cost for airlines, and it would be up to them to decide how to manage the hike. Mr. Kapur said the increase was unlikely to cause a major dent in terms of the overall operating costs of the airlines.
Mr. Kapur also said the Supreme Court's directive to not collect development fee from passengers also imposed a major financial burden on DIAL. “It has affected the liquidity and profitability of the company,” said Mr. Kapur.
DIAL chief executive officer I. Prabhakara Rao said the Delhi airport had seen “unconstrained growth” in the past four years with passenger traffic increasing from about 14 million in 2006 to 34 million at present. “With the increase in infrastructure, operating costs have also increased, which include staff and maintenance,” he said, adding that the operational cost of the airport had almost doubled from last year.
This considerable rise in passenger traffic and inflation has taken a toll on DIAL's finances, said Mr. Rao, necessitating an increase in tariffs to “stem the losses”.
Keywords: Delhi airport