Airfares are set to become cheaper as the Civil Aviation Ministry has recommended a rollback of an airport charge increase, across all non-major airports operated by the Airports Authority of India (AAI), which came into effect December last year.
“Civil Aviation Secretary [R.N.Choubey] has written to AAI earlier this month demanding a rollback of hike in airport charges at non-major airports which were notified in December last year,” a senior Civil Aviation Ministry official said, on condition of anonymity.
The Aviation Ministry asked the AAI to take back the increase in aeronautical charges at non-major airports from July this year. In December, airport charges were raised by 10% — a first such hike in eight years. This was followed by a subsequent hike by 5% in airport charges beginning April 1.
The airport charge increase was applicable on non-major airports such as Amritsar, Nagpur, Bagdogra, Surat, Madurai, Vijayawada, Jammu, Varanasi, Vadadora, among others, which handle an annual traffic of less than 15 lakh.
“The rising aviation turbine fuel prices and switching over to Goods and Services Tax (GST) regime will lead to a sudden rise in the airfares. So, the Ministry has asked the AAI to cut airport charges so that airfares do not soar,” another senior Aviation Ministry official said.
AAI protest
However, AAI, which is already facing a challenge to meet the expenses of flight operations from remote airports under the Centre’s regional connectivity scheme UDAN, has “strongly” opposed the move fearing an impact on its revenue.
“We have strongly opposed the Ministry’s recommendation to rollback airport charge hike. We had recommended a 43% hike last year taking inflation into account, however, an increase of only 10% in airport charges was accepted by the Ministry,” a senior AAI official said.
The AAI has told the Aviation Ministry that the move will lead to a revenue loss of ₹200 crore in 2017-18. “The Ministry wants us to go back to airport charges set in 2009 from July this year. This will lead to a revenue loss of ₹200 crore in 2017-18 and ₹500 crore in 2018-19,” the AAI official said.
AAI Chairman Guruprasad Mohapatra confirmed that the Aviation Ministry has recommended a cut in airport charges and it is already reviewing its proposal. “The Aviation Ministry’s decisions had some representations which we discussed with them. The Ministry will come up with a separate order now,” Mr. Mohapatra told The Hindu .
Service fee
The passenger service fee, which is charged as a part of air ticket fare, was increased from ₹77 per passenger to ₹85 in December last year and then to ₹89 in April this year. A passenger service fee is charged by the airport operator for providing services such as baggage trolleys, escalators, air conditioning at airport terminals, conveyor belt systems for baggage, wi-fi systems, public address systems and other facilities.
Other expenses such as landing, parking and route navigation charges at all AAI airports were also increased by 10% in December which was to be paid by airlines to pass the cost burden onto the customers.
