Flying out of Delhi and Mumbai to get cheaper

NEW DELHI: There’s good news for air travellers. Flying out of Delhi and Mumbai may get cheaper from January 1, 2013, with aviation minister Ajit Singh on Tuesday ordering abolition of airport development fee (ADF) that has been charged from outbound flyers at these two hubs since 2009.

 Mumbai airport levies Rs 100 and Rs 600 on each domestic and international passenger as ADF. Delhi airport charges Rs 200 and Rs 1,300 as ADF from every domestic and international outbound flyer along with a hefty user development fee (UDF) of Rs 196 to Rs 1,068 from all flyers, including incoming ones. The combined impact of these two fees has made Delhi among the most expensive airports in the world for passengers to use.

The government had controversially approved ADF in 2009 to bridge the funding gap of modernization projects at these two airports, ostensibly to allow completion of Delhi’s terminal 3 in time for Commonwealth Games 2010 as Mumbai still remains work in progress. “The expected financing gap in case of Mumbai International Airport Ltd (MIAL) will be Rs 4,200 crore while in case of Delhi International Airport Ltd (DIAL), it will be Rs 1,175 crore if the ADF is abolished from January 1, 2013,” said an aviation ministry statement.

Singh wants this gap to be met through a mix of debt and equity by stakeholders in MIAL and DIAL. Accordingly, the state-run Airports Authority of India (AAI), which has a 26% stake in both these projects, will infuse additional equity of Rs 288 crore in MIAL and Rs 102 crore in DIAL.

“If the present funding gap in MIAL and DIAL are met by equity infusion and loans by the promoters including AAI, ADF will stand abolished,” said the statement. Clearly, the best case scenario for passengers is that MIAL and DIAL raise the entire gap through a debt-equity mix after which they no ADF needs to be paid. A failure to do so would see ADF getting reduced proportionately or getting translated into higher airport charges to recover the same.

DIAL indicated this in a statement. “DIAL in consultation with its partners will, at the appropriate time, based on further communication by AERA, if any, take the views of its lenders and equity partners and analyze its financial structure, including ability to raise further debt and equity, and also the consequential increased impact on the aeronautical tariffs and respond appropriately to AERA,” it said.

Minister Ajit Singh had last week asked AAI not to charge ADF at its upcoming new terminals in Chennai and Kolkata. Now these two new airports, along with Mumbai, will levy only UDF as determined by the Airports Economic Regulatory Authority (AERA). If Delhi and Mumbai airports fail to raise the entire amount, the level of ADF still needed to be charged from next January could be added to UDF charged there or be recovered through higher airport charges.

The levy of steep ADF and UDF has been slammed by almost everyone in the past – the Comptroller and Auditor General (CAG), passengers and parliamentary committees. A CAG report on DIAL tabled in Parliament three months back had slammed using ADF to fund the soaring project cost that went up 43% from the original Rs 8,975 crore in 2008 to Rs 12,857 crore two years later. The project was proposed to be built through a mix of debt and equity alone with no extra burden on passengers. But with the cost going up, the aviation ministry in 2009 approved the ADF. “This led to undue benefit to DIAL at the cost of passengers who were taxed for using Delhi airport through levy of (A)DF amounting to Rs 3,415.35 crore,” the report said.

Source: The Times of India 

Airlines have levied the Airport Development Fee on all flights departing from Delhi

Dear The Tour Planners Customer,

As per the circular received from IGI Airport, New Delhi, airlines have levied the following tax (Airport Development Fee) on all flights departing from Delhi for travel effective 01 December 2011 regardless of the date of issuance. This tax is inclusive of 10.3% service tax.

Any passenger who has booked a ticket on or before 18th November to travel on or after 1st December needs to pay the below mentioned tax amount at the airport. For tickets booked on or after 19th November the above mentioned tax is already included in your total ticket cost.

Domestic Passengers :- INR 221 (Per Person).
International Passengers :- INR 1434 (Per Person).

The Tour Planners

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Airfares to rise as AI sheds below-cost tag

NEW DELHI: Get ready to shell out more for flying as cash-strapped Air India – which has been accused of charging below-cost fares in the last few months to show higher aircraft occupancy – has finally decided to do “course correction”. Private domestic airlines, both full service and low-cost carriers (LCC), which were also forced to cap their fares due to market compulsions, are also likely to go for hikes in the coming days. While no airline was willing to give an estimate of the increase, industry sources said a 10%-15% increase in basic fares was on the cards.

While the aviation ministry said it would not interfere in fares – unless airlines gang up to exploit a situation by hiking fares exorbitantly like last Diwali – it is monitoring AI’s cash flow very closely. Aviation minister Vayalar Ravi has ordered a twice-daily monitoring of AI that is conducted by aviation secretary Nasim Zaidi and the new CMD Rohit Nandan.

“In the past few months, AI was offering very low fares and there has to be a correction as the airline needs a strong cash flow to survive. As oil companies have put us off the cash-and-carry list, we now have a flexibility of Rs 225 crore every month, from which we’ll pay salaries,” said a senior official.

Some fare ‘correction’ has already started happening in the last few weeks that has led a slight improvement in collections for the virtually bankrupt Maharaja. “Comparing August 2010 with same month this year, AI has carried 12,000 more passengers with revenue rising by Rs 110 crore. This 12% increase in yield is expected to strengthen with peak travel season coming and fare correction on the anvil,” said the official.

Instead of the earlier daily payment of Rs 15-16 crore to oil companies, AI is now putting Rs 7.5 crore daily in a special account to pay for oil dues every two months. AI has total dues of over Rs 2,300 crore to oil companies. “August’s basic pay to the over 30,000 employees has been dispatched and their performance-linked incentives could be paid next week,” said sources.

Working in close cooperation after a virtual cold war in the past two years, the ministry-management duo is trying to get AI’s grounded planes back in air. A substantial chunk of AI’s Airbus (A-320) fleet is on the ground due to maintenance requirements. Sources in Delhi airport said at any given time, six to seven A-320s remain grounded at IGI alone. Nandan has released some funds towards this end so that the planes can get back in air.

Source: The Times of India

Nine-seater chartered aircraft crashes in Faridabad

New Delhi: A nine-seater chartered aircraft flying from Delhi to Patna has crashed in Faridabad near New Delhi. Eyewitnesses say the plane has crashed in a residential colony in Faridabad.

Seven people, including five passengers and two crew members were said to be on board the plane. Reports also suggest there were critical patients on board.

Reports suggest the plane went off the radar at a distance of 16 nautical miles from Delhi when it was flying at a height of about 600 feet.

There are no details of casualties as yet.

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