In order to promote domestic flying and reduce operational expenses of airlines, the government is planning to reduce airport charges. “After the 0/20 scheme, our focus is to keep the domestic operations cost of the airlines very low so that flying becomes affordabale for everyone,” a senior civil aviation ministry official said.
“We plan to do this by reducing the airport tariff charges wherever possible and we will try to unlock commercial potential of land around airports and use these resources to cross-subsidise airport charges,” he added.
Airport charges, such as landing, parking and other such charges contribute about 5-10 percent to an airline’s operating cost. However, the move is in line with aviation ministry’s National Civil Aviation Policy (NCAP-2016) which promises to lower airport charges. According to estimates, Airports Authority of India holds a land bank of around 50,000 acres across all airports in the country. The New Delhi International airport has a land bank of around 5,000 acres. But at present, private sector airport operator Delhi Internatioinal Airport Limited (DIAL) is using only 5 percent of the total land for commercial purposes such as hotels, according to the government agreement.
According to the official, “We are in the process of identifying ways to unlock potential land. Within next three months, we would be ready with a policy.” However, he pointed out that the Public-Private partnership model for airports like Delhi and Mumbai would continue to be guided by the respective concession agreements and there would be no change in the land use guidelines for these.
