July 10, 2012
A steep hike in aeronautical fees at one of the busiest airports in India is likely to dent domestic and international operations of the country’s airlines, which are already reeling from a severe cash crunch.
The airlines argue that the three-fold tariff increase at Indira Gandhi International (IGI) Airport in New Delhi will not only unsettle daily operations but also hurt the country’s trade and tourism. “It will make IGI airport the most expensive airport in the world, making it difficult for airlines to recover such high tariff, especially when [the] economic and financial situation of airlines is bad,” the Federation of Indian Airlines (FIA) says.
“Some airlines may not be able to survive and would be under serious financial stress,” FIA adds.
Delhi International Airport (DIAL), Delhi’s airport operator, which is promoted by infrastructure developer GMR Group, received approval in April from India’s airports regulator, the Airport Economic Regulatory Authority (AERA), to increase the fees, starting May 15, by 148% for 2012-13 and 334% for 2013-14.
The fees cover airport charges for landing, parking, housing and ground-handling, among others.
Last week, the FIA moved a local court seeking a stay on AERA’s order to increase the fees collected from the carriers. The court will hear the petition July 10.
India’s aviation industry, once deemed one of the fastest-growing in the world, has been pushed into heavy losses by rising fuel prices, high interest rates and a weak rupee.
“These losses have amounted to 190 billion rupees ($3.6 billion) between 2008 and 2011,” according to the federal aviation ministry. “This year will add another 100 billion rupees to that total loss,” says a FIA official.
National airline Air India, which has been running a loss amounting to 200 billion rupees and massive debt of 430 billion rupees, lost nearly 6 billion rupees owing to a recent employees’ strike.