AAI freezes hike in airport charges to help airlines tide over bad times
30 May 2008
New Delhi: Reeling under the impact of a relentlessly rising fuel bill, carriers operating in Indian skies will heave a sigh of relief with the country's Airports Authority of India (AAI) announcing its decision to put a freeze on the entire spectrum of fees it charges passengers and airlines. In an additional gesture, the AAI also said that the freeze will remain in place till the situation improves, or the price of Aviation Turbine Fuel (ATF) dips.
AAI's announcement will be a matter of great relief for carriers as the services provided by the country's airports manager constitutes the third largest component in their total costs. Services provided by AAI constitute 15% of the total operating costs of airlines, ranking third after the fuel and wage bills. Fuel accounts for 40% of all costs while wages come in second with 30%.
Services provided by AAI to domestic and international airlines includes passenger, terminal and aerodrome facilities that include parking, landing and air navigational services. AAI's charges include the Rs225 passenger service fee on each ticket and parking and landing charges as per the weight of the aircraft.
While senior AAI officials confirmed that they had decided not to increase charges for passengers, airlines and cargo operations in order to cushion airlines from rising input costs, officials of the ministry of civil aviation also confirmed that an in-principle decision had been taken to extend current user charges. Ministry officials said it was their perception that the scope for the aviation industry to absorb additional costs was exhausted.
Airlines are implementing a host of measures to cut costs, with ATF prices almost doubling to Rs60,468 per kilolitre from April 2005. These include dropping flights with poor passenger loads, postponing fleet acquisition plans, implementing e-tickets and negotiating commissions with travel agents to cut costs.
The industry is also contemplating measures such as charging for all baggage carried by passengers.
