Govt gets cold feet on airport charges hike

The government now has second thoughts about its proposal to raise peak-hour airport charges, reports CNBC-TV18.

A government proposal to increase airport charges for peak-time operations seems to be on a crash course. The idea is to reduce congestion during the busiest periods in New Delhi, Mumbai and Bangalore, which handle 15 to 20 % excess traffic during peak hours. But airlines are not impressed. The civil aviation secretary is now considering alternatives including auctioning parking slots at airports.

There are ways of handling the issue, financial is one and there are other methods. We will discuss and come to some optimum method.” Says Ashok Chawla Civil Aviation Secretary.Besides, the govt plans to slap airlines with a development charge for airport modernisation, which airlines say they will pass on to consumers. Even if the development charge replaces the peak-hour airport charge, it’s expected to raise the price of a ticket by about 150 rupees. But the Delhi high court recently challenged the move to pass on the charge to passengers.

Even so, infrastructure experts say this will make little difference to congestion.“Infrastructure constraint will not be resolved by hiking charges. It will only help operators increase the profits” adds Rajeev B Batra ED, KPMG.