The Government plans to have a pre-determined tariff structure linked to inflation for airports as it seeks to address issues hindering investments in the fast growing Indian aviation sector, a senior official said.
Currently, there is cost plus tariff structure wherein the rates for an airport are determined every five years, which is known as the concession period. Many more airports are expected to be operational in the coming years, especially with rising air passenger traffic and infrastructure woes at some of the existing major aerodromes.
“The wide variation in airport tariffs create challenges for domestic and foreign airlines who have to recover the same from passengers,” Airports Authority of India (AAI) Chairman Guruprasad Mohapatra.
Many domestic and global investors and lenders have highlighted this as one of the key reasons for staying away from investing in India, despite being the fastest growing aviation market in the world, he said.
The state-owned AAI manages more than 120 airports. On July 18, the government introduced a bill in the lok Sabha that seeks to amend the Airports Economic Regulatory Authority of India (AERA) Act to have provisions for new tariff models for airports as well as change the definition of major aerodromes.