Rejecting Civil Aviation Minister Praful Patel's exhortation for reduction in parking and landing charges, the developers of Delhi and Mumbai airports have sought the government's permission to increase charges by 10 per cent across the board. Without this, they said, they would lapse into losses. The developers have pointed out that the contract they have signed with the government to modernise the airports permits such an increase after two years of taking charge.
GMR, which is modernising Delhi airport, and GVK, which is handling Mumbai, completed two years last May.
Patel, addressing the Business Standard Open Sky summit in New Delhi on Tuesday, had suggested that airport developers should reduce charges to provide relief to airlines, which are projected to register Rs 8,000 crore in combined losses this year. Airport charges constitute 12 per cent of the cost of operating an airline in India.
Airport developers said the cost of construction material "" steel, cement, etc "" had gone up by 10-15 per cent in the last six months. "If the 10 per cent increase is not granted, the airports in the country will start bleeding, especially as growth in air passengers is slowing down," said a senior executive of a leading airport developer.
A Vishwanath, the chief commercial officer of GMR Hyderabad International Airport Ltd, ruled out acceding to Patel's plea. "According to the concessions agreement, taking Airports Authority of India's parking and landing charges in 2001 as the base rate, we could have increased them year after year and the cumulative increase when we started operations in 2008 would be 38 per cent.
However, considering the scenario, we have decided not to levy it, so the question of reduction does not arise at all."
