Private airports say no to govt proposal to restrict levies

Suggest airports not be forced to bear the burden for providing multi-modal transport

The Association of Private Airport Operators (APAO) wants the government to reconsider the draft proposal that seeks to restrict airport operators from levying charges, concession fees and royalties on maintenance and ground handling companies in all future projects.

The APAO, which represents the GVK and GMR group airports, has also suggested airports should not be forced to bear the burden for providing multi-modal transport connectivity, as this will add to airport charges and increase the cost of flying.

These are among the recommendations made by the private airports body to the civil aviation ministry. The ministry introduced the draft civil aviation policy in October.

The policy aims to improve regional connectivity, bring down fares for short-haul flights and facilitate foreign investment. The government has also drawn up plans to boost air cargo, maintenance, repair and overhaul activities through tax incentives.

WHAT PRIVATE AIRPORTS WANT

• Allow airports to raise tax-free bonds
• Set up Aviation Finance Corporation to finance airport projects
• Duty-free shops at airports should not be under FSSAI
• Private airports view must be taken before granting building height clearance for constructions near airport

“Privately managed airports have a restricted framework for earning revenue. Hence private airport operators should not be be restricted from levying airport charges, concession fees and royalties,” the APAO said in a letter to the civil aviation ministry.

The ministry had proposed in the draft policy that operators waive all fees and royalties and only collect reasonable rent from maintenance, repair and overhaul companies, ground handling companies and cargo handlers in all future projects.

Private airports also want the government to continue the existing policy of restricting new international airports within a radius of 150 km from existing ones. They have demanded that the requirement of an environmental clearance should be exempted for all airports, and not only for those built by the Airports Authority of India as proposed in the policy.

Also the private airports want the government to reconsider some of the proposals in its regional connectivity scheme. The airports want the government to re-examine the 10-year moratorium on airport charges and have suggested viability gap funding should be envisaged only for those routes that have growth potential.

The Centre has proposed a regional connectivity scheme by offering concessions to airlines to fly on regional routes. The draft policy imposes a Rs 2,500 cap on fares for an hour's flight on remote routes. The Centre will fund 80 per cent of the airline's losses and the rest will come from the states. A regional connectivity fund is proposed to be set up by levying a 2 per cent cess on domestic and international tickets.

The APAO also wants the government to abolish the controversial 5/20 rule that restricts new airlines from launching international flights till they complete five years and have 20 aircraft. “The rule is discriminatory and serves no positive outcome,” the APAO said.

While new airlines like AirAsia and Vistara are pushing for the relaxation of the 5/20 rule, Air India and the Federation of Indian Airlines have opposed the move.