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  India   No more airport fee at Delhi International Airport

No more airport fee at Delhi International Airport

FINANCIAL CHRONICLE
Published : Feb 8, 2016, 10:17 am IST
Updated : Feb 8, 2016, 10:17 am IST

AERA has directed DIAL to discontinue collection of airport development fee from May 1 this year.

Discontinuation of (ADF) will make air-tickets cheaper for passengers flying out from the capital’s IGI airport.
 Discontinuation of (ADF) will make air-tickets cheaper for passengers flying out from the capital’s IGI airport.

AERA has directed DIAL to discontinue collection of airport development fee from May 1 this year.

Airports Economic Regulatory Authority of India (AERA) has directed Delhi International Airport Ltd (DIAL) to discontinue collection of airport development fee (ADF) from May 1 this year, effectively making air-tickets cheaper for passengers flying out from the capital’s IGI airport.

While air tickets for domestic flights from Delhi would cost Rs 100 less, those flying international routed out of the city would pay Rs 600 less.

“The ADF levy of Rs 100 per embarking domestic passenger and Rs 600 per embarking international passenger as approved vide Order No. 30/2012 -13 dated December 28, 2012 at IGI Airport shall be continued only till April 30, 2016,” the regulator has said in its order.

“The AAI (Airports Authority of India) be granted six-months time after the cut-off date to reconcile and close the account, and to arrive at the over-recovery or under-recovery of ADF.”

“Based on AAI’s report, the authority shall decide on the treatment of over recovery or under recovery of ADF and to close the ADF account,” it further said.

The public sector AAI is the nodal agency to maintain an escrow account on ADF.The final cut off date has been determined by AERA taking into account data on collection basis. The authority has in the order said that the principal ADF outstanding is Rs 167.89 crore noting the report from an independent auditor.

The regulator had allowed the airport operator DIAL to levy the fee to bridge the funding gap of Rs 3,415.35 crore. GMR group-led DIAL has invested Rs 12,857 crore in building the airport on the public-private-partnership basis.

An airport development fee or ADF is different from user development fee (UDF) that the airport firm collects from inbound and outbound passengers to recover its investment in facilities such as runways, terminal building and other related infrastructure.

DIAL collects UDF from passengers to recoup its investment. It ranges from Rs 208 to Rs 490 for domestic flyers, with international flyers shelling out Rs 565 to Rs 1,131.

Both the levies of ADF and UDF make flying from Delhi airport costlier even as jetfuel price has significantly come down and airlines claim to have passed on part of the benefit to consumers.

The break-up of a Delhi-Mumbai air-ticket on IndiGo airline flight booked for February 18 could be given to illustrate this further. The ticket costing Rs 3,974 comprises Rs 1,000 in taxes and other levies such as the Swachh Bharat cess, service tax and passenger service fee besides UDF and ADF. Out of this Rs 1,000, the ADF and the UDF add up to Rs 677 or 67 per cent.

In its December order, AERA had proposed to slash Delhi airport charges by a whopping 96.08 per cent. Accordingly, UDF would be cut to Rs 10 for each departing domestic passenger. For international travellers, it would be Rs 45 and arriving passengers would not be required to pay any fee.

But with DIAL challenging the regulator's order and also appealing against the basis of tariff calculation in the first control period 2009-14, the December order has not been executed.

With various limitations associated with fixing airport tariff for shorter period, AERA determines tariff for a five-year period and this is referred to as tariff control period.

Location: India, Delhi, New Delhi