Airlines launch legal battle against 3-fold tariff hike

New Delhi: Stung by the three-fold hike in aeronautical tariff to use the Indira Gandhi International Airport here, various airlines of the country have jointly moved the Delhi High Court contending that it will not only hit their operations but also adversely affect the Indian economy.

The airlines have challenged the Airport Economic Regulatory Authority`s (AERA) April 24 order of three-fold hike in the aeronautical tariff, contending that it is unlawful as the tariff has been raised without following the basic norms of the regulated sectors like independent audit prudence check.

The AERA order permits GMR-promoted Delhi International Airport Limited (DIAl) to increase the aeronautical tariff, which comprises various airport charges like those for landing, parking, housing and ground handling etc, by 345 per cent.

The plea made by airlines jointly under the banner of Federation of Indian Airlines (FIA) is to be heard by the high court on July 10.

In their petition, the airlines have pleaded with the court that the hike would prove to be the death knell for many airlines already reeling under severe financial strains. "Some airlines may not be able to survive and would be under serious financial stress," the petition said.

"The decision will make it very difficult for airlines to recover such high tariff particularly in the present-day scenario when economic and financial situation of airlines is bad," the FIA added.

The airlines added that a 345 per cent hike in aeronautical tariff will not merely jeopardise the airport operations but will also have an adverse impact on India and its economy.

"It will make IGI airport as the most expensive airport in the world," the FIA said adding that the escalation of tariff will lead to decline in demand of the IGI airport and it will result in fall in tourist arrival, consequently impacting the trade and tourism industry. This step would damage local and international airlines connectivity, the FIA added.

Opposing the airport regulator`s decision, the petition said, "It has led to a situation where the order of the airport regulator, despite being prima facie illegal, the FIA members will be forced to make unlawful payment."

Talking to PTI, DIAL Spokesperson said, "DIAL has approached the AERA Appellate Tribunal against AERA`s April 24 order. Although the arilines have raised several issues before the high court, at this stage we are unable to comment, as the matter is sub-judice."

Last month in a letter to International Air Transport Association (IATA), which represents all major airlines, DIAL had defended its hike in tariff on the ground that it had not been increased for over a decade.

"The airport charges of Indian airports were not increased during the last ten years except by nominal 10 percent in the year 2009. In Indian context, the airport charges have been uniform across the airports in the country and the same were followed at IGI Airport as well.

"The airport charges before revision have been historically at very low level when compared to the other international airports," DIAl had said in its letter.

The airport operator had also expressed its disagreement with the allegation that the IGI airport would be an expensive airport in the world saying even after including the airport development fee the airport is not ranked among the most expensive airports.

"The domestic charges at IGI Airport post revision continue to be the lowest among the comparators in the world. Even on inclusion of the Airport Development Fee (ADF) it is levied for limited period of time the ranking advances but still is in the lower half ranking," said DIAL.