Airports need transparent, affordable tariffs to attract fliers and airlines

The Airports Economic Regulatory Authority has approved almost four-fold increase in the user fees for passengers flying in and out of Delhi airport, which would range from about Rs 200 to Rs 1,100 depending on sector and range.

The hike comes after a whole decade, save for a 10% increase in 2009, and so may not be unreasonable or out of line with that charged at other major airports in the region and beyond. But it is clear that we need far more transparency in the process of determining user charges.

There is no reason why the fees cannot be fixed on an annual basis, after taking into account costs and factoring in efficiency improvement. The entire process of tariff setting needs to involve far more public participation and user involvement in open forums.

Instead, the procedure now seems to be that the regulator puts out a consultation paper and invites comment from stakeholders. The response of the latter does find mention in the regulator’s long tariff order, but they are mostly that of the operator and the airlines.

What’s surely warranted is a much wider consultation process. More important, what is vital is proper disclosure on how the costs and charges are actually arrived at. The increase in user charges at the Delhi airport is for the 2009-2014 period, says the tariff order. The landing, parking and aircraft housing charges have also been raised.

Overall, while Delhi International Airport Pvt Ltd (Dial), which operates the Indira Gandhi International Airport, had proposed a 774% increase in airport charges, Aera suggested a 334% hike; the final increase would be about 345%, due to delays in approving the fees revision.

Higher charges may not bother well-heeled air passengers, but they should not make the cost of air travel so forbidding that passengers stay away. Aircraft levies should not scare away airlines. Charges for bigger planes — weighing more than 100 MT — have been hiked disproportionately.

And, there is a 25% surcharge for supersonic planes. The complicated logistics of housing and fuelling jumbo jets may explain the higher fees. But we also need tariffs that can attract airlines and fliers to make full use of the sunk costs and make Delhi a regional hub.