No Airport Fees at Delhi and Mumbai From 2013

The government has said it will scrap charging Airport Development Fees (ADF) meant to cover the funding gap for the  development of Mumbai and New Delhi airport from Jan 1, 2013. Currently, ADF charges are Rs.200 per domestic passenger and Rs.1,300 per international passenger at Delhi airport, and Rs.100 per domestic passenger and Rs.600 per international passenger at Mumbai airport.

These charges are part of an agreement signed between the two private players, who manage the New Delhi and Mumbai airports, and the government for the modernisation of the aeronautical infrastructure at the two cities. The IGI airport operator, Delhi International Airport Limited, had submitted the total cost of modernising the IGI airport at Rs.12,857 crore against the original cost of Rs.8,957 crore it gave to the civil aviation ministry in 2009.

 On April 24, the Airport Economic Regulatory Authority (AERA) allowed an escalation of 345 percent in aeronautical charges which allows the operator to collect Rs.200 from departing domestic and Rs.1,300 from departing international passengers. The charges became applicable in May. According to the Civil Aviation Ministry, the proposal will be carried out by infusion of fresh funds from the Airports Authority of India (AAI) which is a part owner of the Delhi and Mumbai airport.

“Civil Aviation Minister Ajit Singh has directed AAI to infuse more equity in Mumbai and Delhi airports and accordingly submit its proposals to AERA,” the ministry said in a statement. However, the proposal comes with a rider that the ADF will stand abolished only if funding gaps are met with equity infusion and raising of loans by the airport operators.