Airport developers demand more fee, another airfare hike likely

May 15th, 2008 - 12:16 am ICT by admin  

New Delhi, May 14 (IANS) India’s airline industry is all set to hike air fares 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.

“This is part of their agreement with the government. They can levy fees and other charges to maintain the airport from the third year of their inception, which they have already completed,” said an official.

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.

“We will look into the issue and also keep the concern of the airline industry, as they are already running in losses,” said the ministry official.

Delhi and Mumbai airports are the country’s biggest and busiest airports. While DIAL projects about Rs.98 billion on the expansion and modernisation of Delhi airport in its first phase, MIAL is expected to invest about Rs.71 billion for Mumbai airport.

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