Air travel costlier, development fee levied at Delhi airport

The Civil Aviation Ministry has finally given nod to the proposal of Delhi International Airport Limited (DIAL), the operator, to levy a development charges of Rs 200 for domestic passengers and Rs 1300 from the international passengers. The ADF will be charged for next 36 months from March 1. It will be over and above the tickets, said a DIAL official.

The sixty per cent of the fliers from the Delhi airport are domestic fliers. As earlier reported by MiD DAY, the DIAL late last year had proposed to levy the development fee under the Airports Authority of India Act, 1994, at Rs 350 per domestic passenger and Rs 1070 per international one.

After similar charges were approved by the government for Banglore International Airport in January, it was very likely now that the proposal of DIAL will also be accepted. However, the levying of development fee proposal submitted by Mumbai International Airport is still pending with the Civil Aviation Ministry.

However, though domestic traveler were bit spared, their international counterparts have been hit hard with a fee of Rs 1300, three hundred more than proposed by DIAL.

The government has now approved to levy 200 from departing domestic passengers and Rs 1300 from international passengers from March 2008. The development fee would be charged for a period of 36 months.

DIAL reported to the government that it was unable to raise refundable security deposits from the market and that the lenders have not agreed to extend any further debt. It was also a problem for the shareholders to infuse additional equity beyond Rs 1,200 crore, which they had already put in, the DIAL said. Added to this was the declining air traffic, which adversely impacted the revenue streams of the DIAL.

In 2007, DIAL had handled around 24 million passengers, of whom 60 per cent were domestic and the rest international. It is expected to cover an estimated shortfall of Rs 1827 crore.

DIAL becomes the first airport operator in the country to levy such a fee to be collected on a temporary basis. The Government has so far approved User Development Fee for new airports in Hyderabad and Bangalore, which is of a permanent nature. The levy, to be reviewed after six months, comes in the wake of DIAL informing the Civil Aviation Ministry that it expected a "substantial shortfall" in implementing the Rs 8975 crore Master Plan.

The charges may play spoilsport for the airlines, which had lowered their fares to make up the losses they were incurring due to the drastic fall in air travelers in 2008. As against 36 lakh air travelers in November 2007, only 30 lakh flew in the same month, the year 2008.