Airlines plan action against higher airport charges

Airlines are joining ranks against government’s decision to impose higher airport charges in peak hours in Mumbai, Delhi and Bangalore. Air India MD V Thulasidas, Kingfisher’s Vijay Mallya, SpiceJet CEO Siddhant Sharma, Air Sahara president Alok Sharma along with senior executives from Jet Airways, Air Deccan, IndiGo and GoAir would call on minister of civil aviation Praful Patel on Tuesday next week, under the aegis of Federation of Indian Airlines (FIA), to take up issues relating to imposition of differential airport charges. Airlines want that any changes in airport charges should be revenue-neutral for the airports while at the same time not burden the carriers with additional costs. They are also in favour of adequate incentives for flying in non-peak hours while enhancing the non-peak time band to certain periods in the afternoon.

The ministry and airline operators have been at loggerheads over the issue of private carriers charging congestion cess of Rs 150 per passenger. The thinking in the ministry has been that private airlines should share some of the additional revenue garnered as a congestion cess with the airport operators. “Any congestion cess should go towards helping airports de-congest and not be used to shore up bottom lines of the airlines,” a senior ministry official said. Airlines point out that differential airport charges would not lead to any large-scale decongestion of air traffic in the peak traffic periods in the morning and evening. “Any curtailment of flights in the peak periods would affect our aircraft utilisation and directly impact our bottom lines,” said a CEO of a low-cost carrier.

As per industry estimates, doubling of airport charges in the peak periods would put an additional burden of Rs 100 to Rs 200 per passenger. With the industry still in the red, and expected to notch up losses of Rs 2,000 crore in the current fiscal, most carriers said they are likely to pass on any additional costs to customers. “The airline industry is not in a financial position to absorb additional costs,” said Alok Sharma, president, Air Sahara. Globally, in major international airports, landing and parking slots are usually alloted to airlines through auctions, with peak travel periods normally priced higher than non-peak ones. Industry analysts expect Indian airport operators would take to that route in the coming years.

Courtesy: TNN

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