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Rediff.com  » Business » Tribunal stays Bengaluru airport's sop to hub airline companies

Tribunal stays Bengaluru airport's sop to hub airline companies

July 02, 2014 15:04 IST

AirAsia crewA tribunal on Tuesday stayed the Bengaluru airport’s move to raise landing and parking charges and offer discounts to carriers making it their hub.

Bangalore International Airport Ltd has offered a 40 per cent discount on landing and parking charges to airlines headquartered in the city that kept most of their aircraft in the airport.

On an appeal by the Federation of Indian Airlines, a lobby group of private airlines, the Airport Economic Regulatory Authority Appellate Tribunal on Tuesday issued an order to maintain the existing charges.

Rival airlines claim the discounts offered will only benefit AirAsia, which has just started flights from its Bangalore hub to Goa and Chennai.

AirAsia had earlier said it might consider shifting its headquarters from Chennai to Bengaluru because the Tamil Nadu government was not offering any support.

The tribunal’s order has come two days before AirAsia’s group chief executive officer Tony Fernandes arrives in Bengaluru to celebrate the airline’s launch.

The Federation of Indian Airlines’ appeal would be heard on July 18; till then, the status quo would remain, said an office-bearer for the federation, asking not to be named.

“BIAL does not have a confirmation or a copy of this order, so it cannot comment,” a BIAL spokesperson said.

“How can they expect us to shift more than half of our aircraft to Bengaluru.

"The airport does not have the capacity, should all airlines do so.

"This can only help AirAsia, which has just one aircraft at the moment,” said an executive with a rival airline who did not wish to be named.

He said landing and parking charges constituted around five per cent of an airline’s operating costs.

The Airport Economic Regulatory Authority had last month allowed the Bengaluru airport to raise user development fees by 41-45 per cent.

Landing and parking charges, too, were revised and a new common user terminal equipment charge was introduced to be collected from passengers.

However, what rankled the Federation of Indian Airlines, was BIAL’s plan to offer 'home carriers' a 40 per cent discount in landing and parking charges.To qualify to be a home carrier, an airline must have its headquarters in Bangalore and park most of its planes at the airport.

New airlines must fly a minimum of one million passengers to and from Bangalore in a year.

Established airlines must carry one million extra passengers to and from the city.

In its application, the federation said Aera, through its tariff order, had given 'preferential treatment to the home carrier, creating a huge difference in the tariff structure'.

Aera also allowed a 145 per cent increase in landing charges at the Bangalore airport and a 105 per cent increase in parking charges.

The International Air Transport Association has complained about the steep hikes.

BIAL said the home carrier tariffs were not exclusive and more than one airline could qualify for these.

A company executive who did not wish to be named said AirAsia had not yet signed up for the tariff plan.

“The targets are very stiff and any airline that delivers such high results deserves a special tariff.

"Till date, in the history of Bangalore’s aviation, no airline has ever delivered one million additional passengers in a year.

"All airports have supported and provided special benefits to their home carriers.

"However, these are extended as a result of bilateral negotiations,” BIAL said in a statement.

“Air India shifted its hub from Mumbai to Delhi a few years ago. Shifting hubs is not impossible,” the BIAL executive added.

OFF RUNWAY?

  • UDF: User development fee was raised 41% for international passengers (to Rs 1,368) and 45% for domestic passengers (to Rs 342)
  • LANDING FEE: Was raised 145% for international flights and 66% for domestic flights
  • PARKING FEE: Was increased by 105%
  • 40% DISCOUNTS: Were planned to be given at the Bengaluru airport to designated home carriers; common-use terminal charge was introduced
  • TRIBUNAL DECISION: The Airport Economic Regulatory Authority Appellate Tribunal has stayed the tariff order (will hear the matter on July 18)

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BS Reporter in Mumbai
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