Govt approves changes to airport tariff regulator Bill

The government today approved amendments to the Airports Economic Regulatory Authority (AERA) of India Bill, 2007.

The Bill is now expected to be introduced in the forthcoming session of the Lok Sabha. The regulatory body will be set up within three months of getting clearance from the House.

According to the Bill, AERA shall determine airport tariffs, which include landing and parking charges, housing charges, navigation and surveillance charges apart from user development fees. The charges would be fixed on the basis of performance standards of the airports, whereas most of them currently are fixed by the airport operator.

The Bill was introduced before the Lok Sabha on September 5 last year and thereafter referred to the Parliamentary Standing Committee on Transport, Tourism and Culture.

The committee proposed certain amendments to the Bill, which said that non-aeronautical services and fuel supply should be brought under the ambit of the regulator. Aeronautical services include landing, parking and navigation, while the non-aeronautical services include office space, food and beverages, and car parking.

The civil aviation ministry said that while the aeronautical services were a monopoly of the airport operator, the non-aeronautical services were awarded to different competing concessionaires through competitive bidding and thus need not be regulated.

However, the ministry said the revenues earned from these services, which went to the airport’s overall account, would be included while fixing the aeronautical charges. The ministry has also included groundhandling and cargo-related services under the ambit of AERA.

The ministry also said that since there would be a common aviation fuel supply facility at airports, which would be operated by the airport developer, the throughput charges levied by the airport developer should also come under the ambit of AERA.

The ministry, however, refused to accept the suggestion of bring all airports under the ambit of AERA. It retained the clause in the Bill that says that only airports handling over 1.5 million passengers should be brought under AERA. As such eleven airports came under the ambit of the proposed regulator.
 

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The ministry said that since the eleven airports that will come under AERA accounted for 85 per cent of the total traffic and revenue in the country, including other airports would make the regulation a cumbersome process.