Sunday , 1 November 2020

Government approves fee hike by Airports Authority of India

The Indian government has approved a ten per cent increase in aeronautical charges at 84 airports across India operated by the state owned Airports Authority of India (AAI).

This at a time when airports across Asia and in many parts of the world, are reducing airport and passenger charges to stimulate air travel.

These charges include landing, parking and terminal area navigation fees that airlines pay for using airports. Naturally, one should expect the airlines will pass on the costs to us passengers, in the form of higher fares, but at a time when airlines globally are in meltdown, will they be able to ? Conveniently, the ministry expect airlines to absorb the increases. They are already bleeding so what difference will a little more make.

Since the start of this year, the Civil Aviation ministry headed by Mr. Praful Patel, has approved increases in aeronautical charges at the now privately operated brownfield airports at Mumbai and Delhi, which account for close to 60 per cent of India’s total air traffic.

The three privately operated greenfield airports at Bangalore, Kochi, and Hyderabad can also be expected to increase their charges, since they are allowed, by contract, to charge what AAI charges.

The government is also expected to clear AAI’s proposal for charging development fees from departing passengers at places like Thiruchirapalli, Trivandrum, Goa, Amritsar and Ahmedabad. Reflecting a warped thinking at the ministry, as demonstrated by the exorbitant fee differential between domestic and international passengers, we can be certain that airports with higher international traffic will have their development fee proposal cleared cleared first.

Airport developers claim a resource crunch in implementing their development plans during the current economic slowdown. The sharp fall in passengers and freight have affected revenue and business plans. Thanks to its lopsided planning, the government has created monopolies and cartels out of airports. Let us not forget, this is the same government which screamed “cartelisation”, just two weeks ago, when private airlines raised their fares.

Risks are inherent in any business, and in a competitive scenario economic downturns are great drivers of efficiency maximisation, leaner organisations and cost effective operations.

Indian passengers have no problem paying for facilities — once they are built; but asking us to pay for them in advance and cover the business risks of these monopoly airport operators is not acceptable. Instead of protecting passengers, the government is only aiding this huge cartel of monopolies called airport operators.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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