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India's airport charges second highest in Asia

By P R Sanjai in Mumbai
July 13, 2007 13:09 IST

Union Civil Aviation Minister Praful Patel's dream to make Indian airports an international aviation hub may have to wait. India's airport charges are the second highest among Asian and Gulf airports, after Hong Kong, which is a world-class airport.

International flights pay 33 per cent more than domestic flights landing at the same airport in India while airports of other countries do not have differential tariff.

According to the International Air Travel Association, aeronautical charges should be cost-based with charging systems that extract only reasonable profits supported by complete, transparent accounts based on standard business prinicples.

"Though India is the second highest among Asian airport, airlines do not get value for money at Indian airports. Airlines pay more yet receive service levels that are way below those of Singapore, Kuala Lumpur, Dubai and Bangkok," said Albert Tjoeng, Asia spokesperson of IATA.

For instance, Kuala Lumpur airport charge about $203 for handling a small Airbus A320 aircraft for a three-hour turnaround while Indian airports charge four times more at $1,060 for the same. Airlines will have to pay $2,331 for handling a long haul flight of a Boeing B777 while Kuala Lumpur charges only $753, which is three times lower.

For a Boeing B747 jumbo jet, Indian airports charge $3,471 for three-hour turnaround while Singapore airport charges are 40 per cent lower at $2,476. While Dubai airport charges $1,341 to handle a bigger Airbus A340 plane, Indian airports levy $3,282.

The airport charges include landing, navigational, route and facilitation and parking charges.

"The charges at Indian airports are 60 to 70 per cent higher than benchmark airports in South-East Asia or West Asia. However, there is tremendous scope to lower airport charges by enhancing non-aeronautical charges," said a Jet Airways executive.

Industry analysts pointed out the airport charges of India are also several fold higher than in Europe and the US. "Handling of a small Boeing 737 will cost only Rs 10,000 at Miami Airport while it is somewhere Rs 27,000 in India," said an analyst.

"The business model of international airports are structured in a way that non-aeronautical revenues will subsidise the aeronautical charges. Singapore and Hong Kong are the best examples for this," said IATA's Tjoeng.

He said India was imposing excessive overflight charges at seven profitable airports to cross-subsidise other non-profitable airports. "India's charges do not comply with International Civil Aviation Organisation charges principles. According to ICAO, the airport charges should be equitable in cost allocation to ensure there are no cross subsidies between users," he said.

"India needs the Airport Economic Regulatory Authority to fulfil its potential as one of the world's great aviation market and to determine price levels, cost allocation and reasonable returns," he added.
P R Sanjai in Mumbai
Source: source