Airport operators urge MoCA for urgent relief amid 25% cut in landing & parking charges

NEW DELHI: Airport operators across India have sought urgent policy and regulatory intervention from the Ministry of Civil Aviation (MoCA) after a recent directive led to a 25% reduction in landing and parking charges for domestic flights. The decision, implemented by the Airports Economic Regulatory Authority (AERA), is effective immediately and will remain in place for a period of three months.

The Airport Operators Association of India has formally written to MoCA, acknowledging the need for intervention but highlighting the potential strain on airport finances. Operators noted that although any shortfall in revenue-referred to as under-recovery in Aggregate Revenue Requirement (ARR)-is expected to be adjusted in future regulatory periods, the immediate impact on cash flows could be severe.

Airports with a higher share of international passengers are reportedly facing sharper revenue declines. In addition to losses in aeronautical revenue, operators are also experiencing a drop in non-aeronautical income, such as retail and concessions, which cannot be easily recovered. At the same time, operational costs remain fixed, as airports must maintain infrastructure, safety standards, and service quality regardless of traffic levels.

Operators have also expressed concern over the lack of consultation prior to the tariff cut, warning that such abrupt regulatory changes could undermine the stability and predictability of India's airport sector. This is especially significant at a time when the government is pursuing privatization of Airports Authority of India assets and encouraging private investment in new greenfield airports.

Another key issue raised is the uniform nature of the 25% reduction, which does not account for variations in airport traffic mix. Operators argue that a one-size-fits-all approach creates financial imbalances and have suggested a more tailored, airport-specific pricing model. They also pointed out that concession agreements require them to share revenue or pay per-passenger fees to AAI, meaning the burden of reduced tariffs falls disproportionately on them.

To mitigate these challenges, operators have proposed several measures. These include deferring payments to AAI without penalties, revising tariffs upward after the relief period, and compensating losses through increased User Development Fees for international passengers. They also urged MoCA to ensure that airlines pass on the benefits of reduced charges to passengers, although they acknowledged that airfare pricing is largely unregulated. (ANI)

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