IATA welcomes govt move to abolish airport development fee

"The intervention by the (Civil Aviation) Ministry is a significant step towards reducing the cost for passengers at Delhi and Mumbai," International Air Transport Association's (IATA) Assistant Director (Corporate Communications) Albert Tjoeng said in a statement from Singapore.

"IATA looks forward to the Ministry's early intervention in resolving other issues related to the high cost environment for aviation in India," he said.

The Ministry has decided to abolish ADF at Mumbai and Delhi airports from January 1, 2013.

While asking the two airport operators to abolish ADF from January 1, the Ministry has directed state-run Airports Authority of India (AAI) and the private partners to infuse more equity in both the joint ventures.

At present, ADF is charged at the rate of Rs 200 per domestic and Rs 1,300 per international passenger at Delhi Airport and Rs 100 and Rs 600 respectively at Mumbai.

With abolition of ADF, the expected funding gap for Mumbai International Airport Pvt. Ltd. (MIAL) would be about Rs 4,200 crore and Delhi International Airport Pvt. Ltd. (DIAL) about Rs 1,175 crore.

Responding to the official directive, a DIAL spokesperson said the joint venture company would take the views of its lenders and equity partners and "respond appropriately" to the Airports Economic Regulatory Authority (AERA) on the issue.

In a similar statement, a MIAL spokesperson said, "We will study the current development, assess its impact on our project and means of finance and after consulting with our Board of directors, partners and lenders, we will respond to the relevant authorities, in due course of time."