Aera to hold airport operators accountable for third-party service quality

Aera draft regulation makes airport operators responsible for overall service quality, including third-party providers, linking tariffs to performance benchmarks

An airport operator will be responsible for maintaining overall service standards at an airport, including those delivered by third-party service providers, under new rules being framed by the Airports Economic Regulatory Authority (AERA), its Chairman SKG Rahate told aviation stakeholders at a meeting on Wednesday, Business Standard has learnt.

 

Third-party service providers at an airport include ground handlers, caterers, retailers, cargo agents, and cab operators.

 

Rahate was speaking at a meeting with stakeholders wherein AERA’s draft regulation, issued on September 2, was discussed. The regulation seeks to link airport service quality with the tariffs — such as user development fees and aircraft parking charges — collected by airport operators from other stakeholders such as passengers and airlines.

   

The draft lays down 32 objective and 18 subjective performance parameters, covering baggage delivery times, queue lengths, washroom cleanliness, and availability of facilities such as trolleys and wheelchairs. Airports that fail to meet prescribed benchmarks could see a reduction in tariffs, while those that exceed targets may be eligible for incentives. The “carrot and stick” model is intended to ensure accountability as airports are natural monopolies where passengers have limited choices.

 

When some airport operators questioned how they could be held accountable for the services of third-party providers, Rahate said: "The fundamental principle is that these performance standards are passenger-centric. The passenger does not care that certain processes are being handled by the airline, and then other infrastructure is being provided by the airport operator. When you and I are travellers, how do we form an opinion about an airport? We go to the airport, we see the overall service, and then we grade the airport. It is difficult to segregate. So, the airport is the hub and the node, and the other service providers have to fall in line with the standards."

 

Rahate added: "For deficiency of the service provider, why does the airport operator have to bear the brunt? Well, here we have adopted the concept that the airport is the hub, and the airport is the primary service provider when it comes to users, particularly passengers. Then, there are other users like airlines."

 

"When an airport is the hub, we are giving that responsibility to the airport operator. Of course, in the rebate mechanism, we will decide whether for the deficiencies of other service providers, we may try to provide a provision that the airport can get compensated or be reimbursed by the service provider. We can't notify different parameters for different service providers. It has to be for the airport as the central hub and the other service providers will have to fall in line," he said.

 

A representative of the Adani Group — which manages eight airports and has one more under construction — urged AERA to implement the standards in phases.

 

"These can be phased out over two-three years time frame. The airport operators are already doing certain checks and balances and surveys. Certain service parameter levels, which are part of the concession agreement, are already being adhered to and are monitored by the airport operator as well as the concession authority. In the first phase, or in the first year, can those parameters be taken care (measured) by the regulator? After a certain time frame, the new service parameters can be added upon. After the third year, more parameters could be added upon," the Adani Group representative said.

 

On this request for phased implementation, the AERA chairman said the group’s comments will be considered while taking the final decision.