For Airlines & Passengers, Flying From Mumbai to Get Costlier

Despite the fire sale of airfares for travel between February and April in order to spruce up volumes, flying from Mumbai is going to get costlier from next month as the Airports Economic Regulatory Authority (Aera) has approved a 154 percent  hike in landing and parking charges at Mumbai’s airport and,  introduced a steep user development fee (UDF) on passengers  departing from the city.

The move will make the GVK Infrastructure-led Mumbai International Airport  as expensive as  Delhi International Airport and is likely to be opposed by carriers as well as passengers.

Domestic travellers will have to shell out Rs 346 as UDF  for February and March, while international passengers will have to pay Rs 692 for the same. Thereafter, for one year, till March 2014, it will be Rs 274 for domestic and Rs 548 for international passengers, respectively. The new UDF  is in addition to the Rs 100 and Rs 600 Airport Development Fee MIAL charges its domestic and international passengers.

Charges on landing, parking, housing, aerobridges, fuel handling and unauthorised overstay by airlines have also been raised, which are bound to be passed on to passengers by way of higher fares. Mint estimates that domestic flights will now pay 40 percent more to land while international airlines will pay 120 percent more.

A report in Business Standard adds ”these measures would lead to an average increase of five-seven percent on domestic fares of Rs 5,000-7,000 from Mumbai.

The cost of modernising Mumbai airport was pegged at Rs 5,826 crore when the project was awarded in 2006. The estimated cost was later increased to Rs 9,800 crore. Time and cost overruns have reportedly increased the project cost further, to Rs 12,300 crore.

High costs in the airports have  led to some airlines pulling out of India. In 2012  more than five foreign airlines withdrew  flights from the Mumbai and Delhi routes, citing high operating costs, including high airport and fuel charges. These include AirAsia, Air AsiaX, Thai AirAsia, FinnAi and Virgin Atlantic and American Airlines.

Other leading global airlines like British Airways, Air France-KLM and Lufthansa were also rethinking their India plans given the high airport charges.

While aeronautical charges helps the airport operators in recouping development cost of the airport, the  global trade body of airlines, International Air Transport Association, had written to the DGCA last  month criticising the Mumbai International Airport Ltd’s (MIAL) decision to demand steep landing fees and other charges. DNA says MIAL blames the government delayed decision-making as the cause for increase in investment costs. 

The Business Standard report quotes Cathay Pacific India general manager Tom Wright as saying: “Indian airports are becoming some of the most expensive in the world; we are concerned. How is this going to help India make its airports global hubs?”