Landing fee hike may add to passenger woes

NEW DELHI: Airfares are likely to go up further as the two leading airport operators, GMR Group-led Delhi International Airport Ltd (DIAL) and GVK-led Mumbai International Airport Ltd (MIAL), are planning to increase landing and parking fees at Delhi and Mumbai airports, respectively.

Airlines, reeling under operating cost pressure, claim they are not in the position to absorb the increased fees and it has to be passed on to passengers.

According to concession agreement between the airport operators and the government, the former can increase airport charges by 10% in the third year of airport operation. The two airport operators have also sought an increase in passenger service fee from the existing Rs 225.

���We have received proposals from both airport operators for hiking airport charges which include landing and parking fees from airlines. We are still deliberating on it. Before taking any decision, we would keep airlines��� financial health in mind. We would ask the operators to maintain existing level of airport charges as airlines are not in the position of bearing it,��� an official in the ministry of civil aviation said.

Delhi and Mumbai airports are the country���s two busiest airports, handling more than 20 million passengers each year. While MIAL is investing Rs 7,000 crore in the modernisation of country���s busiest airport, DIAL is expected to spend Rs 9,800 crore on the expansion and modernisation of Delhi airport in the first phase, before the 2010 Commonwealth Games in Delhi.

The current proposal of hiking the fee is likely to be delayed by the civil aviation ministry as it is concerned over increasing input costs of airlines. The ministry is in the process of convincing various states to bring down sales tax on aviation turbine fuel (ATF) to 4%.

Sales tax levied by various states on an average ranges between 20% to 35%. Almost all the domestic carriers have been incurring losses on account of high fuel price.