Comments
Despite passenger air traffic growth slumping to a four year low, passengers may have to pay more soon for flying from Chennai, Kolkatta, Madurai and Coimbatore besides ten more cities. The Airports Authority of India, which operates the airports in these 14 cities, is awaiting approval for levying user development fee at there.
Meanwhile, the Authority also plans to approach the Finance Ministry for raising fund through infrastructure bonds. Three years back a similar proposal was turned down by the Ministry.
A person familiar with the development told Business Line, “The Authority has submitted plans to levy UDF at Chennai, Kolkatta and Goa to the Airport Economic Regulatory Authority (AERA). On the other hand, proposal for 11 other airports have been sent to the Ministry of Civil Aviation.”
AERA considers proposal for airports with traffic of 15 lakhs and above. Currently, Delhi, Mumbai, Kolkatta, Chennai and Goa fall under the purview of AERA. All other airports are regulated by the Ministry of Civil Aviation. At present, passengers are required to pay development fee when boarding a flight at 12 airports including Delhi, Hyderabad, Bangalore and Thiruvanthapuram.
UDF is a revenue enhancing measure to ensure economic viability of airport operations. Airport developers around the country impose the fee after having undertaken modernisation work at these airports. Sometime airport operators also ask for levying development fee before the modernisation work is completed and it is called Airport Development Fee (ADF). Delhi Airport is one such example.
Airport Authority needs fund for modernisation of other existing airports and therefore made the request for levy of the charge, a person familiar with the development said. “If existing traffic and charges does not generate enough revenue, then it will be really difficulty for the Authority, so an early decision is being requested,” he added. The Authority is also mulling approaching AERA for increasing airport charges. However, a final proposal has yet to be prepared.
In the meantime, the Authority is approaching the Finance Ministry to allow issuance of infrastructure bond worth Rs 3,000 crore. It hopes to have provision for such a bond in the forthcoming budget. The bond is likely to carry a coupon rate of 8.25 to 8.5 per cent.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.