GMR group-promoted Delhi International Airport (DIAL) has sought the airport regulator’s nod to increase airport charges by five times. If the proposal is cleared by the Airports Economic Regulatory Authority (AERA), flying out of the Capital’s IGI airport could cost up to 40 per cent more as airlines pass on the extra burden to the passengers. The private airport company has invested Rs 12,718 crore so far and is seeking a 24 per cent return on its equity. The government holds 26 per cent equity in DIAL through the Airports Authority of India (AAI).
Airport charges are landing and parking fees levied by the airport on carriers and these have not been revised since 2001. “DIAL has submitted its multi-year tariff proposal to AERA. The company has proposed a 500 per cent increase in airport charges in order to recover its investment and a fair return thereon,” official sources said, according to a report by Nirbhay Kumar in The Financial Express. Amber Dubey, Director - Aviation, KPMG, said that a 500 per cent increase in airport charges may spark an increase in air ticket price by around 20 - 40 per cent depending on the specific airport, airline route and other factors. Sidharth Kapur, CFO, Airports Division, GMR declined to comment on the issue.
Currently, an airline has to pay about Rs 12,000 for each landing of a jet like Airbus A320 in case of domestic flight. In case of an international flight, the rate is nearly Rs 20,000. A wide-bodied aircraft flying internationally could be charged up to Rs 100,000 depending on weight. “The hike in airport charges is long overdue both for AAI and other airports. The increase, however will depend on the aviation ministry's policies, AERA guidelines and the views of key stakeholders like airlines, passenger associations etc,” Dubey added. Industry sources said that since DIAL has made over USD 2 billion investment in upgrading the Delhi airport, it could see depreciation alone charged against fixed assets, contributing nearly Rs 650 crore to its annual losses.