The Indian Government’s decision to privatise Delhi airport that has seen airport charges rise manifold has been criticised by the International Air Transport Association (IATA).
Calling on Governments to ensure that privatisation should be well regulated, IATA Director-General Tony Tyler said that tax receipts from the economic activity generated through aviation-enabled connectivity far outweighs the short-term economic gains of misguided privatisation.
“India, for example, developed Delhi into a first class hub airport with the participation of private partners. The facilities are great. But the structure of the concession agreement requires the concessionaire to return 46 per cent of top line revenue to the government,” Tyler said.
A consortium led by the Bangalore-based GMR group won the contract for modernising the Delhi airport.
Pointing out that the Airports Economic Regulatory Authority (AERA) approved a hike of 346 per cent in airport charges at Delhi, the IATA DG said, “That is unacceptable for the industry. A more realistic concession agreement might have prevented it.”
Tyler added that “since our protests”, the Civil Aviation Ministry has directed the airport to remove airport development fees.
“The challenge now is to make sure that this is implemented,” the DG said. The development fee is to be removed from January 2013 although a question mark hangs on whether this will actually happen.
There have been indications that there could be a decline in development fee being charged at the airport although the period for which the operator will be allowed to levy the charge may increase.
AERA will have to take a final call on the issue and announce a final decision latest by December 31.