'Ensure airlines pass on lower aero chathe benefit to flyers; hike our charges, UDF from July': PPP airport operators to Govt

New Delhi: The PPP-run airports have asked govt to ensure airlines pass on the benefit of reduced landing and parking charges to passengers. And also that once this three-month 25% reduced aeronautical charge period ends on July 7, the same should be hiked along with an increase in user development fees (UDF) for international passengers and also a deferment in revenue share with Airports Authority of India (AAI).


The Association of Private Airport Operators (APAO), which represents 14 PPP airports like those in Delhi, Mumbai, Hyderabad, Bengaluru, Mopa, Jaipur, Ahmedabad and Lucknow has written to aviation secretary Samir Sinha with demands of its own after govt had on April 7 asked all 34 major airports to reduce landing and parking charges for airlines by 25% for three months. This has been done to avoid Indian carriers succumbing to losses caused by increased operating costs due to costly jet fuel, the rupee crashing amid declining air traffic


While supporting that move, APAO says move affects their cash flows due reasons like decline in non aero revenue also on lower footfalls, debt repayment and sustainability. APAO secretary-general Satyan Nayar's letter sent to secretary Sinha says: "....revenue losses in the aviation sector are not limited to airlines alone... Airport operators are contractually obligated to remit revenue share or per passenger fee to AAI... concessionaires operating at airports are seeking waivers citing loss of business..."


APAO has made the following requests to Sinha:

• Direct AAI to defer payment of revenue share / per passenger fee, for an amount equal to the projected reduction in landing and parking charges
• Direct AERA to hike landing and parking charges immediately after completion of the relief period
• Loss due to landing and parking can be compensated by increase in UDF for international passengers in the same period
• Direct AAI to not treat such deferment as a default
• Aviation ministry must ensure benefit of reduced landing and parking charges is passed on by airlines to passengers.

"However, given that airlines operate in a largely unregulated pricing environment, there is no enforceable mechanism to ensure that reduced charges translate into lower airfares. Consequently, the intended public benefit may not fully materialise, while airports alone bear the entire financial burden," APAO letter says.