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AERA exempts small aircrafts from landing fee, will boost regional connectivity

Economic Times:  July 27, 2016

New Delhi: The Airports Economic Regulatory Authority (AERA) has corrected the anomaly in its earlier tariff orders and has exempted aircraft with 80 seats or less from being charged a landing fee, a move that's going to give a fillip to the regional connectivity plan.

According to an earlier tariff order, which is still in force, AERA had allowed airport operators of Delhi and Mumbai to charge landing fee to aircraft with seating capacity of 80 or less. Norms exempt smaller aircraft from landing charges at all airports and no other operator charges them.

The order will help boost the regional connectivity plan that pegs on making operations by smaller aircraft cost effective. The order is likely to benefit airlines that operate 70-seater aircraft and includes SpiceJet, Air India and Jet Airways.

Airlines such as Air India and SpiceJet had made several representation to AERA on the issue. "In the new tariff order for Delhi, we have ordered that these smaller aircraft will be exempted from paying landing charges. We have also informed Mumbai airport about the same," said a top AERA official, who did not wish to be named.

The official said the matter would have been addressed in the first tariff period itself if proper representation would have been made by these airlines. "We received a lot of representations from airlines later and the exemption was put in place," said the official.

AERA's order will not be implemented immediately because tariff order for Delhi airport is in the courts. Delhi International Airport Ltd (DIAL) in an email response to a query said the charge is on the basis of directions given by AERA under the AERA Act 2008.

"Exemption from landing charges for aircraft with maximum 80 seats capacity was given by Airports Authority of India ...dated February 11, 2004, which was applicable to only AAI airports at that point of time. The AERA Act 2008, came into force on January 1, 2009, according to which tariff for major airports has to be determined by AERA," the airport company said in an email response.

Airlines, however, complain that the exemption helps in running viable operations with smaller aircraft in the country and should not have been removed.

"Since their aircraft are used for shorthaul flights, the cost of operations are very high. It is also becoming increasingly difficult to continue operations with such high landing charges," said an Air India official, who did not want to be identified.

He said the airline already had to pay a lot of money as landing charges in the past. "The government plans to provide regional connectivity but at the same time smaller aircraft are being charged landing fee. How can it implement its plan when such charges are only going to make operations by smaller aircraft unviable?" asked the official.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.