Flying from Chennai to cost more

NEW DELHI: The price for various services at Chennai Airport may see a 90 per cent hike as Airports Authority of India (AAI) has proposed a User Development Fee (UDF) of Rs 160 and Rs 500 on d

Published: 07th May 2012 06:24 AM  |   Last Updated: 02nd June 2012 10:17 PM   |  A+A-

NEW DELHI: The price for various services at Chennai Airport may see a 90 per cent hike as Airports Authority of India (AAI) has proposed a User Development Fee (UDF) of Rs 160 and Rs 500 on domestic and international passengers, respectively.

The proposal for UDF as well as other charges is now with the Airports Economic Regulatory Authority of India (AERA), which is likely to give its final decision in the next six months. AAI is proposing to follow a multi-year tariff plan, by which tariff at the various AAI airports will be reviewed by the AERA every five years.

Chennai is one of the first airports for which such a proposal has been made.

Going by the promises, new terminals are likely to be operational by June, after which, the AAI will have to capitalise its expenditure, leading to losses at one of the few profit-making airports.

“The AAI is running a deficit of Rs 200 crore in the construction of new terminals. Capitalisation and depreciation has to be accounted for,” an AAI official said.

A hike of almost 50 per cent has been proposed in the landing, parking and housing charges.

 “Rentals for office spaces are being increased to Rs 1,250 per sqm against the existing Rs 940 per sqm. For ticketing areas, airlines have been asked to pay Rs 2,500 per sqm against the existing Rs 940,” an airline official said.

“To top it all, an additional 25 per cent utility charge is being proposed on the overall bills for the airlines. The annual periodic increase of 7 per cent will also be applicable.

“We are still trying to calculate the operational cost with the many new add-ons and how much of it the airline can absorb.

“Flying out of Chennai will definitely become expensive like Delhi and Mumbai,” the official added.

While UDF was being charged at many other metro airports, Chennai and Kolkata were recent additions. AAI Chairman V P Agrawal said that it was a part of the infrastructure development cost.

“Any infrastructure investment has a definite risk of this kind. But two years down the line, things will iron out,” he said.

Chennai has been a preferred airport for expansion of operations, going by  statistics. Domestic aircraft movement at Chennai airport in February 2012 was 7,003 compared to 6,290 last year.

International aircraft movement at Chennai airport in February 2012 was 2,706 compared to 2,413 last year. While passenger movement also increased, freight decreased to 26,842 metric tonnes from 30,644 in February last year — a decrease of 12.4 per cent.

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