IGI Airport air travel costs to skyrocket

The ticket prices can go up further depending on to what extent the airlines pass on the additional burden on them due to various charges to the passenger.

Terming the move as “extremely disappointing”,the International Air Transport Association IATA said the increase in airport charges would “make Delhi the world’s most expensive airport.”

In its order fixing landing,parking and other tariff for Delhi’s IGI Airport,the Airports Economic Regulatory Authority AERA hiked the charges by 345.92 per cent for 2012-13,which would be effective from May 15.

This one-time hike is however less than half of the 774 per cent hike sought by GMR-led joint venture Delhi International Airport Limited DIAL,which welcomed the decision but said the raise was “inadequate” and “much below our expectations”.

The AERA also introduced higher rates of user development fees UDF for both domestic and international passengers this year,with the rates going up further from April next year.

This is the first time that even incoming passengers are being included in the ambit of UDF. The UDF rates applicable for 2012-13 would go up considerably in 2013-14.

The order also covers the charges to be levied on airlines and other airport users for uplift of fuel and using the Common User Terminals or CUTE.

Reacting to the development,officials of Indian and foreign carriers,some of whom requested anonymity,said the move would burden the passengers flying out of IGI Airport and discourage foreign airlines from operating in Delhi.

While outgoing passengers have so far been paying an Airport Development Fee ADF of Rs 200 for domestic and Rs 1,300 for international travel,the UDF would now be levied in addition. ADF is a temporary collection to help DIAL face the immediate cash crunch for entire construction and development of the Delhi airport.

The AERA order said the UDF for international travel would be Rs 845.50 for outgoing passengers travelling between 2,000-5,000 kms and Rs 699.17 for incoming ones. For those travelling beyond 5,000 kms,the UDF would be Rs 1,068 for outgoing and Rs 881.10 for incoming.

For domestic travel,a passenger flying up to 500 kms would pay Rs 231.40 and an incoming one Rs 195.80. Outgoing travellers flying more than 500 kms would pay Rs 462.80 and an incoming passenger Rs 391.60.

Effective April 2013,the UDF for international travel would rise to Rs 895.26 for 2,000-5,000 kms for outgoing passengers and Rs 741.16 for arriving ones. For those flying over 5,000 kms,it would be Rs 1,130.85 for outgoing and Rs 93295 for incoming passengers.

In the domestic sector,an outgoing traveller flying less than 500 kms would pay UDF of Rs 245.02 and an incoming one Rs 207.32. The outgoing and incoming flier,travelling more than 500 kms,would respectively pay Rs 490.04 and Rs 414.65.

Maintaining that the tariff hike was “inadequate”,GMR-led DIAL said it would “compare favourably to other major global airports where passenger fees range between USD 25 Rs 1300 to USD 30 Rs 1560 on an average,thus making a very soft impact on the passengers.”

But it also acknowledged that “the approximate increase in ticket pricing on account of passenger fee per passenger for the year 2012-13,works out to Rs 290 on an average for domestic and Rs 580 on an average for international.”

Industry sources said the increased airport levies would also be onpassed by the airlines to the fliers,raising prices of tickets further.

While IndiGo President Aditya Ghosh said “we are extremely concerned about unreasonable burdening of the passengers and airlines with this increase”,Jet Airways’ Senior Vice President Finance M Shiv Kumar said “the entire cost increase will be passed on to the passengers.”

Ghosh said the AERA order “fails to factor the views and objections filed” by the Federation of Indian Airlines,a body of all Indian carriers,regarding the “escalated project cost” of Rs 12,857 crore from the initial estimated Rs 8,975 crore and other issues.

Maintaining that AERA’s decision on the airlines’ appeal was pending,Ghosh said,”thus the order is not a comprehensive order. While we evaluate next steps,we feel that such increase is against the interests of common consumers.”

DIAL’s claim that aero tariffs in Delhi were “amongst the lowest in the world” was rebutted by IATA,which said the increase would make Delhi the world’s most expensive airport.

In a statement,IATA said while the Indian airline industry was “already sick,this increase in charges will put it in intensive care from a cost perspective. The government needs to better coordinate its policies on aviation.”

Seeking the Civil Aviation Ministry’s intervention to to moderate the “steep” increase,IATA said the government needed to take into consideration the long-term development of Indian aviation at its hubs.

It said the proposed tariff rate card was “unacceptable as it violates ICAO’s policy of cost-based charging by having different landing fees for international and domestic flights.

“Charging UDF based on distance also violates this principle and in addition,distorts competition and creates a non-level playing field for carriers operating direct flights and carriers operating through an intermediate hub.”