Non-peak sops to offset hike in charges on airlines: Patel

Justifying its decision to hike charges imposed on airlines for peak-time operations at three major airports, the government today said the burden would be offset by incentives offered during non-peak hours.

"This is not a permanent measure. It is a temporary step to tide over the problem of congestion till the infrastructure to expand capacity of airports to handle heavy traffic is in place," Civil Aviation Minister Praful Patel said in New Delhi today.

The ministry is working on a proposal to hike or even double the peak-time navigation and other airport charges to de-congest air traffic over Delhi, Mumbai and Bangalore airports from March 25, the start of the summer schedule.

The charges could be halved between midnight and 0500 hours.

The decision could lead to rise in airfares in peak hours because airlines are likely to pass the burden to customers.

Patel said the move was aimed at ensuring these airports were used equitably throughout the day. "We will increase certain charges. These will be offset by an equal amount of incentives for non-peak time operations," he said.

The ministry was working on a system of disincentives for airlines services between 7:00 am and 10:00 am and 6:00 pm and 10:00 pm.

Most private carriers have already imposed a congestion surcharge on their tickets but state-owned Indian has not done so.

"Peak hour pricing at airports adds to passenger costs and rarely achieves the desired outcomes. Airline operations, are largely driven by complex networks, timetable issues, etc, so there is little scope for change regardless of peak pricing penalties. Peak hour pricing will also place a short term constraint on passenger and freight demand and in the long term, lower benefits generated for users and the wider economy," an International Air Travel Association statement said in response to the decision to raise charges.

IATA and the Airports Authority of India had a current pricing agreement and expected formal consultations on any proposed changes, it added.

"The costs should not go up. On the contrary, it should come down for a conducive environment for domestic airlines. The costs at airports are already high," said Jeh Wadia, managing director of Mumbai-based budget carrier GoAir.

The navigation and landing cost will constitute 4 to 5 per cent of total cost, said Ajay Singh, director of budget airline SpiceJet, adding, "The impact will not be too big for budget airlines."

"We have been making requests for differential tariffs on airport charges during peak hours and non-peak hours. But the impact of this increase cannot be ascertained now because the details of the increase are not known," Singh said.

Industry analysts pointed out that the airport charges at metro airports are always grossly overrated.

"This will further weaken the budget airlines and full service carriers," they said.