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According to AERA's Order, which was passed on Monday, the UDF charges have been approved till March 31, 2016. In spite of opposition, the Authority hiked the rate and Chennai follows in the footsteps of all the other metros in charging UDF.
With the increase revenue at the Chennai domestic airport for a day is expected to be around Rs 40 lakh and Rs 146 crore for a year. In the international sector, out of 12,238 passengers travelling from Chennai airport, revenue is estimated to be at least Rs 81 lakh per day and Rs 300 crore per year.
Landing and parking fees for aircraft were also increased and the Airlines will incorporate the fee, which is passed on to embarking passengers, on fresh tickets, while those who have booked their tickets for travel after March 1 may have to pay the extra amount at the airport before checking in.
While, for the first one parking charges will be free after that the AAI will be charging Rs 10,000 for every hour. While Airbus A-320 will be paying Rs 40,000 for landing and Rs 7000 for parking for one hour, a Bombardier Q-400 will be free of charge for landing and for parking it will be paying Rs 3,000 per hour, according to industry experts.
The Chennai International Airport (CIA) is one of the 11 international airports which are under the management and ownership of AAI. CIA received 12.93 million passenger throughput in 2011-12.
Any airport with annual passenger throughput exceeding 1.5 million has been categorised as a major airport. As the passenger throughput at CIA exceeds 1.5 million, CIA is a major airport and, thus, is considered for regulation of tariff and other charges by the Authority, said in the Order.
AERA attributed the increase to recover its expenditure on the new terminals, which was inaugurated on January 31 by the Vice President of India, and was indeed necessary to maintain the newly built terminals.
Of the total project cost of Rs 2,862.71 crore, Rs 2,015 crore for the project were approved by Ministry of Civil Aviation for the Modernisation and Expansion project of CIA comprising domestic and international terminal buildings, elevated corridor and allied works including consultancy, extension of runway and construction of a bridge on the Adyar river, Rs 311.71 crores was proposed towards reconstruction of Taxiways and parallel Taxi Tracks and Rs 536 crore was proposed towards cargo facility upgradation.
The Authority had further proposed to consider Rs. 343.52 crore as initial RAB for determination of tariffs on the basis of the audited accounts of CIA for FY2010-11, audited by C&AG, said in the Order.
Stake holders comments
The order also recorded some of the stakeholders comments including Federation of Indian Airlines (FIA), Sri Lanka Airlines and Cathy Pacific and other.
FIA stated that the Authority in the Consultation Paper Number has not deliberated upon the rationale for levying UDF and that there is no basis for levy Rs 165 and Rs 667 towards UDF on embarking domestic and international passengers respectively.
Sri Lankan Airlines and Cathy Pacific have submitted that the proposed increase of 118% in international landing charges and 83% in parking & housing charges is very high and after considering the impact of Service Tax into account, the effective increase will be even higher.
They added, an increase in rates will cause a very huge financial impact to the airlines and would force the airline to reconsider their operations at CIA.
Lufthansa cargo has stated that the average increase in cargo handling rates in the last 10 years has been 66% and the average rental increase in last 9 years has been to the tune of 78%. The Airline further requested the Authority that cargo services gives additional revenues to create infrastructure and thus the increase of landing fee should be exempted for cargo flights.
The stakeholders have further stated that the proposed increase will not benefit the Airport in the long term as it could diminish the competitiveness of the airport vis-à-vis other regional airports which charge lesser and more reasonable rates for similar services.
Federation of Indian Airlines (FIA) has submitted that the airlines have been going through difficult times and have suffered losses significantly in the last two years due to high ATF and recent depreciation of the rupee. FIA further submits that increase in various components of aeronautical tariffs as proposed by the Authority will erode airlines capabilities to increase fares to sustain its operational capabilities.
FIA has said while the Authority has proposed a minimum Landing Fee of Rs 5000 per landing, it should also prescribe a maximum bracket.
