BackSC refers Delhi airport tariff case to tribunal
Indian airlines allege that DIAL is charging higher fees even though the tariff regulator had ordered a downward revision in airport charges for the 2014-19 period
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Mumbai: Passengers flying out of New Delhi’s Indira Gandhi International (IGI) airport will have to wait longer for lower charges after the Supreme Court referred the matter to a tribunal.
Indian carriers allege that the operator of the New Delhi airport, GMR Group-controlled Delhi International Airport Ltd (DIAL), is charging higher fees even though the tariff regulator had ordered a downward revision in airport charges for the 2014-19 period.
DIAL had obtained a freeze on the downward tariff revision of 96.08% ordered by the Airport Economic Regulatory Authority (AERA) from the Supreme Court. The lower tariff was supposed to take effect from 1 January 2016.
Now, the Supreme Court has referred the case to the Airports Economic Regulatory Authority Appellate Tribunal (AERAAT). The apex court has asked the tribunal to conclude the matter within three months.
“Having regard to the facts and circumstances of this case, we request the said tribunal to conclude the matter concerning tariff for the period 2009-2014 along with 2014-2019 pending before it within a period of three months from the date of receipt of copy of this order," the Supreme Court said in an order dated 12 May. Mint has reviewed the order.
A spokesperson for DIAL declined to comment on the matter.
Airport charges, levied to finance capital expenditure and pay for maintenance, are set for a five-year duration called the control period. These charges are passed on by the airport operator to airlines and, in turn, to travellers. The first control period ran from 2009 to 2014.
For airlines, an implementation of the proposed 96.08% cut is critical as it will help rationalize airport charges for them and allow them to offer lower fares to passengers.
In contrast, lower tariffs will mean a hit for the airport operator.
On 9 May, Mint had reported that all airlines operating out of the Delhi airport have been asked to pay much higher landing and parking charges against what was suggested by AERA.
State-run Air India Ltd is the most affected, Mint reported, citing people close to the development. Air India uses the Delhi airport as a hub for a majority of its domestic and international destinations.
Citing an unidentified Air India executive, Mint reported that the Delhi airport is one of the costliest airports to land a Boeing 787, 777-2LR or 777-3ER aircraft and is more expensive than the airports at Dubai, Singapore, Frankfurt and London.
“Ideally, referring (the case) to AERAAT is a good decision for airlines and passengers as a hearing on this case has been postponed multiple times since April. But I think it is impossible to come out with a decision by AERAAT in next three months," an airport consultant said on the condition of anonymity.
“It is going to be another long-drawn battle," he added.
Airport charges have gone up by 346% in Delhi, 269% in Chennai, 385% in Kolkata and 164% in Mumbai over the past three years. In 2012, the Comptroller and Auditor General of India said that the ministry of civil aviation favoured private companies managing the New Delhi and Mumbai airports.
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