Airport selloff shouldn't lead to steep hike in user fees:IATA

Voicing concerns over the government's plan to privatise the four state-run airports which might result in a steep hike in user fees, global airlines body IATA has said an all-out sale will only benefit the operators.
"My suggestion is that the government should carry out a rigorous cost-benefit analysis before taking a decision on these four Airports Authority-run airports in Chennai, Kolkata, Ahmedabad and Jaipur," International Air Transport Association (IATA) Director General and Chief Executive Tony Tyler told a group of reporters here.
"Whatever be the decision of the government, it should not lead to a repeat of what has happened in Delhi, Mumbai and Bangalore where airport costs for both the airlines as well as the passengers have shot over roof," Tyler added.

Opposing outright privatisation of these airports, Tyler argued that "if attracting investment is the purpose of selling out these airports to private parties, then there is no logic in that as the Airports Authority of India has already developed the infrastructure in these facilities.
"But if the government is looking at increasing operational efficiencies and not just its revenue maximisation, then it should look at giving away management contracts of these airports to private sector hands and not go ahead with an outright sale so that there is no arbitrary jump in user charges as happened in the privately run facilities in Delhi, Mumbai and Bangalore," Tyler said.

In past many years, beginning with the second term of the past UPA regime, the aviation ministry has been trying to privatise Chennai, Kolkata, Ahmedabad and Jaipur airports, even as the AAI had put in thousands of crores of taxpayers money in modernising these facilities.

The AAI and ATC unions have been opposing the move tooth and nail, though.
Pointing out that the massive cost escalation at the privatised metro airports were due to the 'hyrbrid till' method of calculating revenues, Tyler called for following the 'single till' method to calculate revenue from various airport activities and the resultant user fees so that all the stakeholders benefit and not just the airport operator.

The Delhi, Mumbai and Bangalore airport operators follow 'hybrid till' system, which calculate aeronautical and non-aeronautical revenues separately.
In contrast, the "double till" revenue assessment considers only the aeronautical revenues to fix user charges.