Airline fee to go up at Mumbai, Delhi airports?

NEW DELHI: Close on the heels of clearing the levy of Rs 375 as user fee from passengers flying out of Hyderabad, the aviation ministry could now make India���s biggest airports costlier for both airlines and fliers.

After initially disallowing GVK���s demand for a 10% hike in aeronautical charges for Mumbai airport on the ground that it would further hike costs and make flying more expensive, the ministry is now learnt to be favourably considering the same.

���A 10% hike in aeronautical charges in third year of operation was allowed in the agreements with both GMR and GVK groups for Delhi and Mumbai airports, respectively. Mumbai International Airport (MIAL) has been pursuing this demand as its financial model has been based on higher revenues in third year and it is being considered at highest level in the ministry,������ said sources.

If Mumbai is allowed the hike, the GMR Group is also likely to ask for a similar treatment as it is spending huge amounts on building the new runway and upcoming terminals.

As part of the higher airport charges, MIAL has also asked for a hike in the passenger service fees (PSF) that is levied on each ticket. Airlines are likely to pass on the increased costs to passengers.

Mumbai is the busiest airport of India and along with Delhi handles over 60% of the about 3,760 aircraft movement daily. Airlines say higher charges at Mumbai and Delhi would affect their overall cost of operations and lead to higher fares.

The GMR and GVK groups took over Delhi and Mumbai airports two years ago on May 3, 2006, and the agreement with the government allows them to hike aeronautical charges by 10% in the third year. In the fourth year, airport charges would be decided either by Airport Economic Regulatory Authority and if that is not set up by then, the aviation ministry will do the job.