Draft aviation policy to help new airports: Report

The proposed aviation policy will pave the way for fresh foreign capital inflows into upcoming public-private partnership airports as the policy seeks to end uncertainties, says India Ratings.
The report did not elaborate any numbers, but said even though the new policy will not be applicable to the three privately run airports in Delhi, Mumbai and Hyderabad, nonetheless, the clarity of thought is crucial for the upcoming airports.
The new proposal is in line with the ministry's recent policy guidance for the GMR-run Hyderabad International Airport, its Associate Director Siva Subramanian said.
The draft policy suggests that all future airports under the public-private partnership framework will determine tariffs on a 30 per cent 'hybrid till' model, under which 30 per cent of non-aeronautical revenue will be cross-subsidised with aeronautical revenue to arrive at the user development fee.

This is a change from the earlier 'single-till' approach by the Airport Economic Regulatory Authority. Hence, the new tariff model is a win-win for both, the airport developers and passengers, Subramanian said.
On the tariff front, the policy says in the event of excessively high tariff for a particular year, the airport may be advised to spread out the collections over the ensuing years. This, according to him, will demand on the operator and regulator to ensure that there are adequate reserves/cash flows to meet the debt service requirements.
The report also called for removal of environmental clearance for the expansion of projects and brownfield airports.