Logistics

Coronavirus impact: Airport operators seek moratorium on concession fees as airlines cut down operations

Forum Gandhi Mumbai | Updated on March 13, 2020

A view of the Mumbai airport   -  PTI

With as many as 580 flights cancelled due to the outbreak of coronavirus, the Association of Private A irport Operators (APAO) has asked for a moratorium on payment of concession fees to the regulator. .

In a letter written on March 11, APAO highlighted the troubles being faced by the aviation industry, which is impacting the airports industry.

“This letter was written two days ago as an initial representation to draw government attention. Our main issue was that our cash flow will get adversely affected,” Satyan Nayar, Secretary General, APAO, said speaking to BusinessLine.

585 international flights cancelled

Nearly 585 international flights have been cancelled to and from India between February 1 and March 6 because of the outbreak of coronavirus. As many as 16 international airlines have cancelled 492 flights and four private Indian airlines have cancelled 93 flights during this period.

https://www.thehindubusinessline.com/news/coronavirus-impact-over-580-flights-cancelled-to-and-from-india/article31051980.ece

“If both domestic and international passengers coming to India will reduce, our aeronautical and non-aeronautical revenues. Duty free shops, F&b outlets, ground handling agents, aviation food service providers have already started demanding relief on their payment to the airports. This will have a cascading effect. Hence we want a moratorium on concessionaire fees,” Nayar explained.

APAO has written this letter to the Secretary of Ministry of Civil Aviation (MOCA) wherein it has also proposed levying of a nominal passenger facilitation charge as part of airline fares.

Countering this, Amitabh Khosla, Country Director - India, IATA, told BusinessLine, “India’s private airports need to do a reality check on their suggestion to impose a new levy at a time when passenger demand is plummeting on account of the Covid-19 outbreak. What is needed now are relief measures to help the aviation industry, and eventually when the situation is resolved to look at ways to grow demand, instead of a self-serving interest in protecting profits without recognising what is happening in the world around us. It is imperative that we focus on reducing the overall cost of travel and work collectively to identify mutual cost saving opportunities.”

However, Nayar told BusinessLine that although APAO had initially asked for a levy on passengers, there has been a rethink since then. “I don’t think it’s fair to levy these taxes on the passengers. We are going to write a fresh letter next week regarding the same,” Nayar said.

When asked what is the total revenue loss expected from the airports perspective, he said that the total revenue loss could be understood only after the fiscal ended and that too would differ for each airport. However, from the overall air traffic perspective, there will be an impact of “30-50 per cent depending on the airport,” he added.

Published on March 13, 2020

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