Single-till model burdens consumer the least: AERA

The Airports Economic Regulatory Authority of India (AERA) feels the single-till model to calculate charges is the best for consumers, as they have to pay the least under this model.

There are three models to calculate charges at the airports — single till, double till and hybrid till.

“While deciding the charges, debate in India is between the airlines and airport operators. Abroad, the debate is between passengers and airport operators. Passengers will be least burdened in the single-till model and this is the best model for the industry,” said a senior AERA official, who did not want to be identified. He said, had they calculated the user development fee (UDF) for international passengers at the Hyderabad airport on the hybrid till, it would have been Rs 2,400. It is Rs 1,700 on the basis of single till.

He said had they calculated the user development fee (UDF) for international passengers at the Hyderabad airport on the hybrid till, it would have been Rs 2,400. It is Rs 1,700 on the basis of single till.

In the single-till model, both aeronautical and non-aeronautical charges are taken into account to calculate the airport charges. In the double-till model, aeronautical charges are calculated on the basis of revenues from aeronautical and non-aeronautical charges on the basis of collections from non-aeronautical.

In the Hybrid model, the charges are calculated by taking all the aeronautical and 30 per cent of the non-aeronautical revenue into account. Charges at the Delhi and Mumbai airports are calculated on the basis of hybrid model. Delhi and Mumbai airports were bid out to private parties on the condition that they will follow hybrid model.

AERA has adopted the single-till model that was opposed by the airport operator. “The airport sector in India has still not picked up and needs support from the government. Hybrid model provides good returns and would renew interest of private operators,” said a GMR spokesperson.

Analysts feel the hybrid-till model will be good for the country now. But AERA is not ready to accept the argument the returns on single-till model would make the sector less lucrative.

“The argument of making the sector less lucrative is bogus. We have asked the airport operators to quote as much return as they want and they will get it on single till. Now, if the return is same, how can the model become less lucrative,” he asked. He said the airport operators want 70 per cent of the non-aeronautical revenue to be allocated to them for management cost.

“An airport operator is the owner of the airport during the concession period. Also, why do they need 70 per cent of the revenue for management cost, when they will be offered decent returns,” he said.

The airlines feel any model that burdens the stakeholders less should be taken because the sector has to grow.