Air travel could soon be cheaper from Delhi and Mumbai airports due to the efforts of the government. The civil aviation ministry could soon consider a move that will enable scrapping of the levy of airport development fees (ADF) on passengers at the New Delhi and Mumbai airports by arranging alternate sources of funding to bridge the funding gap, well-placed government sources have confirmed. Top sources said the civil aviation ministry may consider asking the state-run Airports Authority of India (AAI) to pump in equity to compensate for any scrapping of the ADF.
The Delhi and Mumbai airports are run by private-led consortia. Currently, `200 per embarking domestic-route passenger and `1,300 per embarking international-route passenger is charged as ADF from passengers at Delhi airport while it is `100 per embarking domestic-route passenger and `600 embarking international-route passenger as ADF at Mumbai airport. If the government bites the bullet, passengers at Delhi and Mumbai may not have to pay this amount as ADF.
As of now, ADF is only levied on passengers only at Delhi and Mumbai airports and is different from the user development fees (UDF) which is also levied on passengers at a few airports in the country. Levy of UDF — as authorised by the Aera — is however expected to continue.
According to Indian aviation authorities, levy of ADF is for “funding or financing the costs of upgradation, expansion or development of the airport at which the fee is collected”. On the other hand, UDF is “levied to ensure fair return to the airport operators on the investments made for providing airport services” and is “intended to cover any deficit in revenues so as to ensure fair return on investment”.
Just last week, civil aviation minister Ajit Singh had ordered the AAI not to propose any levying of ADF at the AAI-run Chennai and Kolkata airports.
Discussions are also likely to be held by the government with the Airports Economic Regulatory Authority (Aera) and the private operators of the New Delhi IGI and Mumbai airports. The government may go ahead with the move at Delhi and Mumbai if the civil aviation ministry or AAI manage to convince the Aera and the private operators that the funding will be adequately compensated in the event of scrapping of the ADF.