Thaindian News

New Delhi, April 26 (IANS) Taking domestic and international flights from the Delhi and Mumbai airports is likely to get trifle cheaper, with the Supreme Court Tuesday striking down the airport development fee (ADF) being charged by private operators.

An apex court bench of Justice R.V. Raveendran and Justice A.K. Patnaik scrapped the fee, which had been challenged by an NGO, Consumer Online Foundation.

The provision of ADF provided under the Airports Authority of India Act could not be taken recourse to by the private operators running Delhi and Mumbai airports to impose such a fee on domestic and international passengers, the bench ruled.

As a result of the ruling, tickets are likely to become cheaper by Rs.200 for domestic travellers and Rs.1,300 for international passengers boarding from Delhi. Similarly, tickets from the Mumbai airport are also likely to become cheaper by Rs.100 for domestic and Rs.600 per international passengers.

The apex court, through its judgment, set aside the 2009 verdict of the Delhi High Court which had rejected the NGO’s petition challenging the fee the private operators of the international airports in these cities were charging.

In its initial reaction, the Delhi International Airport Ltd. (DIAL), the company which operates the Indira Gandhi International Airport here, said that it is yet to receive a copy of the court’s order and will only react after that.

“We are yet awaiting a copy of the order and will be in a position to respond only after perusing the same,” said a DIAL official in a statement.

Similarly, an official from the Mumbai International Airport Ltd said the firm could only comment after studying the judgment.

“Right now, it is too early to say anything till we study the judgment. We will decide the future course of action after that,” the official told IANS.

Industry experts feel that the order will have a devastating effect on DIAL and MIAL, who had raised a bridging loan to cover the deficit in funding for construction of the modern terminals at both the airports.

“It is a complete shocker for the industry. The loans have already been raised, that too on the government’s sovereign guarantee that ADF would be collected. Now how does someone expect these companies to pay back the loan?” a leading sectoral analyst, who did not wished to be named, told IANS.

According to the expert, ADF only accounted for five percent to eight percent of the total seat price, while the passenger also enjoyed state-of-the-art facilities at the terminal.

Meanwhile, Civil Aviation Minister Vayalar Ravi has said that the matter is being looked into by Airport Economic Regulatory Authority (AERA), which will take proper action on the issue.

“It is being looked up by AERA, they are the legal authority to take proper action on the ADF issue, and they will after they go through the complete order,” Ravi said.

In March, Ravi had said that a proposal to review the development fee at Delhi and Mumbai airports had been received.

“The proposal for review of development fee at IGI Airport, New Delhi, and CSI Airport, Mumbai, has recently been received by AERA,” Ravi had told the Lok Sabha during parliament’s budget session.

He said that the fee is a pre-funding mechanism for financing mega-airport projects like in Delhi and Mumbai when other options are not available.

Till now, DIAL has collected Rs.1,199 crore in development fee from March 1, 2009, to January 2011.

The government had approved the levy of development fee from March 1, 2009, for a period of 36 months, to be used to bridge the funding gap of Rs.1,827 crore in the development of the IGI Airport at Delhi

The Airports Authority of India (AAI) gets 45.99 percent of the gross revenue earned by DIAL.

Interestingly, the fee is collected by all the airlines operating from Delhi and Mumbai from each departing domestic and international passenger. In turn, the airlines get a collection charge of Rs.5 per passenger.