Airlines see Delhi among costliest airports

NEW DELHI: The move to seek review of airport charges comes within days of the aviation ministry realizing that its order to scrap airport development fee (ADF) in Delhi and Mumbai may not translate into cheaper flying. Airport authorities and the Airports Economic Regulatory Authority (AERA) had warned that it could lead to higher UDF for flyers and an overall hike in aeronautical charges on airlines, which would be passed on to flyers.

Airlines, foreign and domestic , consider Delhi among the costliest airports in the world and the most expensive one in Asia. It is also the only airport levying UDF on incoming passengers as well. “Such high charges prevent traffic from growing and thus make it difficult for Delhi to compete with nearby Asian airports like Dubai or Kuala Lumpur in becoming a big regional hub. It’s high time the government intervened,” said an airline official.

The ongoing Kingfisher fiasco, and the burden of keeping Air India alive on thousands of crores of taxpayers’ money, has made it clear that the government will have to improve the cost environment for airlines. “Kingfisher and Air India may be suffering from mismanagement and lack of proper business model, but even airlines believed to be run professionally are struggling to survive. The price of aviation turbine fuel (ATF) in India alone is enough to kill an airline,” admitted a senior official.

The government has allowed airlines to import jet fuel and use oil companies’ infrastructure, but these steps haven’t gone very far. Aviation minister Ajit Singh has yet again asked the finance ministry to put ATF in the declared goods category so that it attracts a uniform low rate of sales tax across all states.