New Delhi [India], June 26 (ANI): Communist Party of India (Marxist) MP John Brittas has written a letter to Union Minister of Civil Aviation Kinjarapu Rammohan Naidu, expressing grave concerns over the recent tariff revisions at Kerala’s Thiruvananthapuram International Airport.
Adani Airport Holdings Limited manages the Thiruvananthapuram International Airport.
In the letter, MP Brittas said that the revised tariff order issued by the Airport Economic Regulatory Authority (AERA) on June 21, 2024, effective July 1, 2024, carries significant implications for passengers and airlines utilising this airport.
“As per the new tariff order, it is learned that the User Development Fee for domestic passengers will increase by 50 per cent, from Rs 506 to Rs 770, for the year 2024-25, with further hikes in the subsequent years. Specifically, AERA stipulated that the applicable User Development Fee for embarking domestic passengers from July 1, 2024, to March 31, 2025, will be Rs 770, and Rs 330 for disembarking passengers. From April 1, 2025, to March 31, 2026, domestic travellers on departing flights will be charged Rs 840, while those arriving will pay Rs 360,” the letter mentioned.
Brittas said these fees will rise in the following financial year to Rs 910 and Rs 390, respectively. Additionally, international passengers will face twice the tariff levied on domestic travellers,” he added
The Rajya Sabha further said that the landing charges for aircraft will see an even steeper increase, rising three-fold from Rs 309 to Rs 890 per metric tonne (MT) of aircraft weight, with further escalations in the following years. Parking charges have also been significantly revised upwards, he said.
Brittas said these substantial increases in User Development Fees and other charges will undoubtedly impose a heavy burden on passengers and airlines, potentially reducing the accessibility and affordability of air travel for the citizens of southern Kerala and beyond.
He said that the economic repercussions of these hikes, especially in a post-pandemic recovery phase, could be detrimental to both the aviation sector and the broader economy of the state as he alleged that the airport is given a raw deal thereby hampering its future development and growth.
“It is equally pertinent to note that, while the airport operator argued for upward tariff revisions before AERA, it is evident from AERA’s order and another consultation paper that the airport operator deliberately under-projected the non-aeronautical revenue, such as from food and beverage and retail sales, which is used to cross-subsidise passenger costs,” Brittas mentioned in his letter.
“In its order, AERA, raised the projected non-aeronautical revenue four-fold to Rs 392 crore, as opposed to Rs 102 crore proposed by the airport operator. While the norm at public-private partnership airports such as Delhi, Mumbai, Bengaluru, Hyderabad, and Cochin is to have non-aeronautical revenue account for 50 per cent of the total operation and management (O&M) expenses, Thiruvananthapuram Airport’s claimed estimate of Rs 102 crore in non-aeronautical revenue against Rs 1,752 crore in O&M expenses was notably low,” it said.
The letter further stated that reportedly, the AERA found that this was against the interests of airport users, as 30 per cent of non-aeronautical revenue is typically used to cross-subsidise aeronautical expenses.
“The Rs 102 crore estimate was also merely a third of what the Airports Authority of India earned in nonaeronautical revenue before privatisation from 2016 to 2021, despite the impact of the Covid-19 pandemic,” the letter added.
Brittas said that even AERA’s current projection of non-aeronautical revenue appears conservative. These aspects suggest a two-pronged strategy by the airport operator to extract maximum revenue from passengers by significantly increasing the User Development Fee and other charges on one side while underreporting non-operational revenue, which would otherwise help in cross-subsidising passenger fares. Such unscrupulous business practices must be addressed promptly to protect the interests of passengers, he added.
“It has also been reported in the news reports that the AERA also criticised TKIAL for awarding the master concessionaire for food and beverage and retail services to its own holding company, Adani Airport Holding Limited. AERA noted that the company “did not have direct experience of handling such services and may have to engage other experienced operators for the provision of different services,” Brittas stated adding that no benefits had been granted to air travellers through cross-subsidisation.
Earlier, AERA had remarked that the master concessionaire was selected using exaggerated bid criteria designed to exclude competition, such as a steep annual turnover requirement of Rs. 750 crore.
“Given the gravity of this situation, considering the astronomical tariff revisions and deficient non-operational revenue projections and their severe impact on airfares, I fervently urge your good self to instruct the concerned authorities to take urgent actions for reviewing this order of AERA,” he said.
The CPI-M MP further urged the Union Minister to ensure that the spirit of public-private partnership in airport management remains intact and that the interests of passengers and the airport are safeguarded against disproportionate financial strains. (ANI)
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