Aviation Daily Aug 24 , 2010 , p. 07
The Airports Authority of India (AAI) has asked the government to make changes to the aviation policy that currently waives landing and parking charges for aircraft with less than 80 seats operated by domestic scheduled operators and helicopters of all types.
It is time to start charging parking and landing fees for these aircraft, says AAI, as it will give a boost to the development of regional airports it is currently upgrading and constructing.
Currently, some private regional airports are losing money including five in Maharashtra set up by the Reliance Group. “This is simply because there is not enough traffic to support them. There are no sources of revenue including retail, [food and beverage] and revenue from hangars. Some charges for landing will need to be enforced to get return on investment for the operators,” says Ansgar Sickert, managing director of Fraport India.
“The present policy does not work as many airlines fly smaller aircraft on trunk routes and do not find the need to connect to tier 2 and 3 cities. The intention of the policy was to encourage connectivity to small and remote places particularly in the Northeast,” adds Sickert.
Airlines such as Paramount, which had an all-Embraer fleet that is now grounded, and Kingfisher, which flies ATRs, have a competitive advantage on these trunk routes. Kingfisher flies its ATRs on major metropolitan routes including Hyderabad-Mumbai, Bangalore-Mumbai and Bangalore-Chennai, thus avoiding stiff landing and parking charges paid by larger aircraft.
“This defeats the purpose of encouraging regional routes,” says an official. “It stands to reason if we are providing a service, we should get return for the investment. We could certainly look at giving concessions to airlines over a period of time. The government should look at this proposal if it does not want AAI to become an Air India,” a senior airports official says.
“For regional airports to be catalysts of growth, airport infrastructure needs to be enhanced,” says Vidya Basarkod, CEO of Reliance Airports. She adds challenges in development of smaller airports include limited traffic, high cost of mandatory infrastructure and security and limited sources of aeronautical and non-aeronautical revenue.
AAI manages 125 airports, which include 11 international airports, eight Customs airports, 81 domestic airports and 25 civil enclaves at defense airfields. AAI also provides Air Traffic Management Services (ATMS) over India’s entire airspace and adjoining oceanic areas with ground installations at all airports and 25 other locations.