Airport Developers Demand More Fee, Another Airfare Hike Likely

Logistics Insight Asia - Industry News, 20/5/2008

India's airline industry is all set to hike airfares further as developers of Delhi and Mumbai airports plan to increase their landing and parking charges.

The airline industry says it is not in a position to bear these increase and so would pass the burden on to passengers.

GMR-led Delhi International Airport Ltd (DIAL) and GVK-led Mumbai International Airport Ltd (MIAL) are working out plans to increase landing and parking fees at Delhi and Mumbai airports.

According to sources, Delhi and Mumbai airport developers could increase airport charges by 10 percent in the third year of their airport operation.

The two airport operators have also sought an increase in passenger service fee, which at present is Rs 225 per passenger.

An aviation ministry official confirmed that they have received proposals from Delhi and Mumbai airport operators for a hike in landing and parking fees from airlines.

But the government is not in a hurry to address the concern of the airport developers in this regard.

The ministry is trying to convince the states to bring down the sales tax on aviation fuel - also called Aviation Turbine Fuel (ATF) - to 4 percent.

Sales tax levied by various states ranges between 20 percent and 35 percent. Almost all the domestic carriers have been incurring losses on account of high fuel prices.