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Monday, 24 September, 2012, 12 : 00 PM [IST]

Mumbai airport seeks 660% hike in tariffs

Also wants to introduce UDF
The GVK Infrastructure and Power Ltd-controlled Mumbai International Airport Pvt. Ltd has sought permission from the Airports Economic Regulatory Authority (AERA) to increase tariffs by 660 per cent per cent and has also sought an introduction of a User Development Fee (UDF) to be imposed on passengers since the airport modernisation project cost has nearly doubled to Rs 12,300 crore since it was privatised, according to two government officials.

AERA will publish a consultation paper in the next fortnight to discuss the demand for tariff hikes by the Mumbai airport. The operator declined to comment on the development.

Aeronautical tariffs include parking, landing and navigation fees for airlines, besides passenger levies on fares, as per a Live Mint report by Tarun Shukla. Earlier this year, New Delhi airport had sought a 775 per cent increase and was granted a 340 per cent for the financial year starting April 1, making it the most expensive airport for passengers in the country. From May 15 this year, AERA allowed the Delhi airport operator to charge an additional user development fee of up to Rs 540 for every domestic passenger and Rs 1,200 for every international passenger, depending on the length of the flight.

Unlike in the case of New Delhi airport, where increased tariffs were granted after the modernisation was completed in 2010, in the case of Mumbai airport, the new tariff may come before even the airport is fully modernised which is slated to end in 2014, said one of the officials cited above.

“It is shocking that government is allowing mandatory fees to be collected per passenger. Taxing passengers in a monopoly environment is detrimental to growth and possibly not fully ethical, more so when airports around the world with similar or less volume are offering better services for lesser or no fees,” said Keyur Joshi, COO of MakeMyTrip.com. He stated that the government should look at policies adopted by Singapore and Dubai, where airports focus on making money from ancillary revenue and not fees on passengers. “We need airports and thought processes like Changi (in Singapore), where airlines are incentivised and not penalised for using their airport,” he added.
 
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