Govt mulls charging development fee at 9 airports

After imposing development fee in four private airports, the government is mulling charging it from passengers departing from another nine airports in the country.

A proposal to impose development fee on passengers departing from nine airports being modernised by the Airports Authority of India (AAI) is likely to get the government's nod soon, which would enable the state-owned body recover its cash shortfall, official sources said today.

The proposal is being vetted by the Finance Ministry, the sources said, adding that the fee would be levied from May 1 for a "limited period", if approved.

The fee would be about Rs 200-250 for outbound domestic passengers and Rs 1,000 for departing international travellers, in line with those being imposed on passengers travelling out of major privatised airports at Bangalore, Hyderabad, Delhi and Mumbai.

The nine airports where AAI is carrying out major expansion and modernisation activities include Kolkata, Chennai, Jaipur, Thiruvananthapuram, Amritsar and Trichy, the sources said.

The cash shortfall, the sources said, has arisen out of the falling income, reduction in flights and passenger traffic due to the slowdown affecting the aviation sector and increase in costs.

The passenger traffic in the first three months of this year has fallen by almost 12 per cent over the same period last year.

"Our purpose is not to tax the travelling public, but to raise cash to meet the shortfall in carrying out the modernisation work at these airports," sources said.

With the AAI developing a total of 35 non-metro airports, the imposition of the development fee for the remaining airports would be decided on a "case-to-case" basis, depending on the cost situation and the shortfall, they said.

Sources said a major reason for the fund shortage was due to the fact that though several airports were being modernised and expanded, the air traffic was not improving as airlines were not operating more flights from these destinations due to the economic slowdown.

"So even after we put in money, there is not much of return on our investment," they said.

The privatisation of major airports like those in Hyderabad and Bangalore as well as the closure of the existing airports at the two cities have had an adverse impact on AAI's revenue, with the government-owned airport developer suffering an annual loss of Rs 330 crore.

A Parliamentary Standing Committee had some time ago sought the withdrawal of user development fee being charged by private airport developers, saying it was "particularly important in the context of the policy objective to make air travel more affordable."

In another report, the Committee headed by CPI(M) MP Sitaram Yechury had also recommended that the Civil Aviation Ministry entrust commercial operations of terminals at 35 non-metro airports with AAI.

It said the commercial development of airport land and related non-aeronautical infrastructure had been "slyly" taken out of the ambit of the AAI by the Planning Commission and was being given to private business in the name of private-public partnership.