Letters: Airport conundrums

In your edit “Clearing the runways” (February 16), you have correctly pointed out that undue restrictions imposed on domestic private airlines from availing of the full advantages of bilateral agreements is one of the principal causes for the state of the airlines. But your reference to Indian airports in the same vein is definitely misplaced.

We have repeatedly pointed out that the airport charges currently applicable at Delhi, and for long, have been the lowest in the world. They constitute a mere two to three per cent of the gross revenue earnings of any airline (from Delhi) as opposed to the 40+ per cent they pay on account of some of the highest aviation turbine fuel charges anywhere in the world. You will appreciate that after the privatisation of some Indian airports, there has been a marked improvement in both infrastructure as well service quality. Today, as many as three airports in India rank among the top 10 in the world.

 

You have highlighted the problem of creating airline hubs in India to non-utilisation of bilateral route agreements, but that is only one part of the equation. The critical part to ensure seamless transit is good world-class infrastructure — and that comes at a price. The tariff revisions we, as airport operators, have asked for are:

a) According to the Concession agreements signed with the government and, therefore, need to be honoured as sovereign promises;

b) These Concession documents are important for a healthy infrastructure development in the country in a public-private partnership mode.

c) In no way ensuring any undue or unfair gain.

d) Is only ensuring a fair market rate of return on the equity invested and well as the risks associated with it.

You have stated that passengers are critical of the design of the new terminal but our Airports Service Quality ratings for the year ending 2011 and for every year since we took over operations speak otherwise. If you are attributing poor design to long piers then the airport operator is not to be blamed because they were in-built into the Operation Management & Development Agreement (OMDA) that necessitated 98 per cent throughput of the airport through aerobridges and that consequently meant longer piers.

Perhaps you have been led into believing that the airlines are pulling out due to high costs but a deeper perusal will indicate that their own economic woes of unviable routes and load factors as well as allocation of equipment on more profitable routes is the main reason. The Delhi Airport will soon be adding about four new routes in the summer schedule as will also the case be in Hyderabad Airport. In fact, the additional charges as are being proposed by AERA will mean an increase of only Rs 70 per passenger for the airline towards landing and parking. And if AERA implements the new User Development Fee, it will mean an additional Rs 400 only per passenger. When you consider that there has been no revision in airport development charges in the last ten years (except for a small 10 per cent in 2009), these charges pale into insignificance. They have not kept pace with inflation either.

Arun Bhagat, 
EVP & Group Head-Corporate Communications, GMR Group, Bangalore

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