EBM News
EBM News

AAI proposes 4 per cent tariff hike, rates unchaged for 2 decades

NEW DELHI:  The Airports Authority of India (AAI) has proposed four per cent hike in tariff for air navigation services.  AAI has said that the tariff has not seen much change in last many years and review is needed considering the technology upgradation and other factors. Earlier, prices were increased by 10% in December 2016 for both domestic and international tariff. However, the domestic tariff increase was rolled back in July 2017. Further increase of 5% was made in April 2017 for both domestic and international flights. This was later rolled back for domestic flights in July 2017.

“Hence, in effect, for domestic flights, rates which were applicable in 2001 continue to be applied even after almost two decades,” said the authority in its consultation paper. “In line with the philosophy for determination of tariff for air navigation services, an increase of 4% in tariff for year 2020-21 and another increase of 4% in tariff for the year 2025-26 is proposed,” the AAI has said. The AAI has floated a consultation paper on the issue seeking suggestions and objections over the proposal.

Highlighting the potential of the aviation sector, it said India is a nation of 1.35 billion people which has a middle-class population of over 350 million. “Around 700 million passengers must be flying per annum at conservative estimates and 2017-18 figure of 187 million passengers is a small fraction of the total potential. Hence, untapped potential in the Indian skies is large,” it said. It also said that the requirement of trained employees in air navigation center is on the rise. “AAI intends to recruit the personnel to meet the shortfall in the requirement vs availability of officers at the required levels. Hence, cost of all such additional employees to be recruited have also been considered in the projections for the 10 years.”