Airport operators likely to seek compensation from IndiGo for biz loss

Private airport operators, who are assessing revenue loss due to the unprecedented cancellation of nearly 4,500 flights by IndiGo last week, are having discussions internally on claiming compensation from the airline.

 

“Yes, we are having discussions amongst the senior management on whether we should look at compensation for the loss of business. We have a symbiotic relationship and it is a sensitive issue. Let the crisis get over and flight operations stabilise, then we will take a final call. We will get a complete picture once all flights are back, which might take some few days,” says a senior executive of a large private airport operator, who did not wish to be named.

 

A bulk of the aeronautical revenue of airports comes if aircraft fly, even though its share has been falling with non-aeronautical revenues going up (retail income, duty free, lounge services etc). These include landing and parking fees, which are billed directly to the airlines. But in most cases, they are partly or fully passed on by airlines to the flyers and factored in the ticket prices as they become part of the airlines operating cost. Airports also charge passenger service fee directly from the passengers, which is used for airport’s security, facilitation and other services. In some airports, passengers are also charged a user development fee, which is used to fund modernisation and expansion of the airport.

 

Leading airports in the country, like Delhi, Mumbai, Bengaluru and Hyderabad, have been the hardest hit due to the massive wave of cancellations. According to the data available, Delhi airport saw 1,149 cancellations between December 3 and  8. Of this, on December 5, IndiGo cancelled all 464 flights in Delhi.

 

At the Hyderabad airport, total cancellations between December 5-8 were 671 flights, while in Mumbai, as many as 900 flights were cancelled between December 4-9. Even tourist spots like Goa, especially during the marriage season, saw cancellations of over 120 flights till December 8, according to estimates.

 

At an all-India level, IndiGo flies around 2,300 flights daily. On Monday, it flew 1,800 flights, but cancelled 500 flights across the country. With a market share of 65 per cent, it dominates the domestic market and in many sectors, it is the only airline which offers connectivity.

 

 

Skyline setbacks

 

-         As many as 1,149 flights cancelled between Dec 3 and 8 at Delhi airport. On Dec 5, all 464 flights from the airport cancelled

 

-         In Mumbai, as many as 850 flights cancelled till date since the crisis began

 

-         In Hyderabad, over 671 flights cancelled till the Dec 8