SpiceJet delays delivery of three Bombardier aircraft

The decision of Delhi International Airport Ltd (DIAL) to raise airport and user development charges steeply has found its first casualty in low-cost carrier SpiceJet, which has postponed the delivery of three of the seven Bombardier Q 400 aircraft it was to receive.

The airline had planned to make Delhi its hub for the three aircraft, from where it would fly various destinations in the North, but it says the raised charges made it change its mind.

To a question on how the increase in airport charges had impacted the airline, its CEO, Neil Mills, says: “We were going to receive all seven Bombardier aircraft soon, but to begin with, we have taken only four for Delhi and want to see how it goes. The earlier plan was to take the risk of fielding the seven machines from the Delhi airport. But now, with the user development fees (UDF) as a proportion of tariff becoming so high in the short-haul sector, there is too much risk sitting on the company.”

On the other hand, the GMR group-run DIAL, shot back saying the raised charges were a fraction of their fares. GMR group CFO (Airports) Sidharath Kapur said: “SpiceJet is a valued customer; but, if they don’t want to fly more aircraft from Delhi, it’s their call. The new rates are for all.”

Kapur added the rise in airport charges and UDF was only a small percentage of their fares — not more than 8-9 per cent of their revenues. “The additional burden of higher parking and landing charges would not be more than Rs 40 per passenger, while UDF and ADF together will be around Rs 400, while their average fare is about Rs 5,000” he said.

Currently, SpiceJet has 12 Bombardiers meant to operate on regional routes, with Delhi, Hyderabad and Chennai as hubs. According to DIAL, earlier, aircraft below 80-seaters, including the Bombardier Q400, did not have to pay airport or parking charges as part of the government policy.

However, under a new order of the airport regulator for Delhi, cleared in May this year, they now have to fork out about Rs 10,000 as landing and parking charges at the Delhi airport. Besides, the regulator has also raised the UDF on customers by an average 345 per cent.