New Delhi: The civil aviation policy's adoption of a hybrid-till model for calculating airport fees could push up airfares, by raising airport charges for airlines instead of bringing them down as per the policy's stated objective.
The higher costs could kick in soon at 13 major airports including Chennai and Kolkata, where tariffs are due for review this year.
While the draft policy released in October last year had stated that the hybrid-till model will be followed for “all future airports,” the final policy, released last week, states that “future tariffs at all airports will be calculated on a ‘hybrid-till’ basis.” Airport costs constitute 10-14 per cent of an airline’s operational costs.
The hybrid-till model, under which 30 per cent of airport operator’s non-aeronautical revenues would be used to subsidise airport costs, is in contrast with stance taken by the Airports Economic Regulatory Authority (AERA), a tariff regulator set up by an Act of Parliament in 2009 for major airports across the country. AERA has adopted the single-till model for determining aeronautical tariffs that can be set by airports, wherein passengers and airlines are charged less.
“AERA has been in favour of the single-till model which is more consumer-oriented. It hasn’t changed its official view till date but the government feels there should be better prospects for airport developers,” said a senior government official, on conditions of anonymity.
19/06/16 Somesh Jha/The Hindu
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The higher costs could kick in soon at 13 major airports including Chennai and Kolkata, where tariffs are due for review this year.
While the draft policy released in October last year had stated that the hybrid-till model will be followed for “all future airports,” the final policy, released last week, states that “future tariffs at all airports will be calculated on a ‘hybrid-till’ basis.” Airport costs constitute 10-14 per cent of an airline’s operational costs.
The hybrid-till model, under which 30 per cent of airport operator’s non-aeronautical revenues would be used to subsidise airport costs, is in contrast with stance taken by the Airports Economic Regulatory Authority (AERA), a tariff regulator set up by an Act of Parliament in 2009 for major airports across the country. AERA has adopted the single-till model for determining aeronautical tariffs that can be set by airports, wherein passengers and airlines are charged less.
“AERA has been in favour of the single-till model which is more consumer-oriented. It hasn’t changed its official view till date but the government feels there should be better prospects for airport developers,” said a senior government official, on conditions of anonymity.
19/06/16 Somesh Jha/The Hindu
