Tariff as per AERA report will hike ticket costs at Pune airport from December

Tariff as per AERA report will hike ticket costs at Pune airport from December

Pune: The Airports Economic Regulatory Authority of India (AERA) has determined the aeronautical tariff to be levied at the civil enclave Pune airport, which will be effective from December 1.

The AERA submitted a report to the Director General of Civil Aviation (DGCA) on November 9, which mentioned that the authority would accordingly determine parking and housing charges; Passenger Security Fees (PSF) and User Development Fees (UDF) to be levied by the Airport Authority of India (AAI).

The report has been titled 'In a matter of determination of aeronautical tariffs at civil enclave in respect of Pune airport for the second control period (April 1, 2016, to March 31, 2021)'.

According to the report, “AERA has determined the aeronautical tariff to be levied at the civil enclave Pune airport w.e.f. December 1, 2017. The authority has proposed to merge UDF and PSF charges while only PSF-Security charges will be applicable on each domestic and international embarking passenger.”

AERA is the economic regulator of India’s airport infrastructure sector and air navigation services. It determines the tariffs once in five years for major airports on the tariff proposals made by the airport operators, after taking into consideration their expenditure, investments for improving the airport infrastructure, services provided and their quality, air traffic growth, viewpoints of all stakeholders, etc. At present, 16 airports in our country, including Pune, are covered under the AERA Act.

As per the AERA order, “A User Development Fee (UDF) and Passenger Service Fee (PSF)-Security is being introduced w.e.f. December 1, 2017, which will result in air ticket costs going up for travel from Pune airport. UDF is levied under rule 89 of Aircraft Rules 1937. It is conventionally levied to ensure a reasonable return to airport operators on their investments made for providing airport services and to cover the shortfall in revenues.”

According to the report, for the period December 1, 2017 to March 31, 2018, PSF of Rs 130, UDF of Rs 350 for domestic passenger and Rs 700 for international passenger will be charged per passenger embarking from the Pune airport. This tariff has been issued by AERA for the period December 1, 2017 to March 2021 with a provision of an increase of 4 per cent (per annum) every subsequent year in UDF per departing passenger.”

Dhairyashil Vandekar, an aviation expert and analyst, said, “The upgradation of infrastructure and facilities at the Pune airport is urgently required as the present airport is unable to cater to the growing air traffic. As the Airports Authority of India (AAI) is known to fund such capital-intensive projects from their internally generated revenue rather than through external assistance or borrowings, the introduction of UDF was expected in view of the expansion of terminal building and other infrastructure like additional parking bays, aerobridges, etc, being created at the Pune airport at a cost of Rs 400 crore.”

“While the air travel from Pune will become dearer with the levy of UDF, I do not expect it to have a major impact on the traffic except affecting a small market segment of the low-cost carriers. The PSF for facilitation services has been merged with the UDF while the security services portion in PSF is being charged separately as PSF-Security at Rs 130/embarking passenger,” he said.

“However, taking into consideration high yield and profits earned by the AAI at the Pune airport, UDF could have been further reduced. Also, the AERA has determined the tariff based on Hybrid Till mechanism instead of the Single Till, which was used in the previous five-year period and would have been more just to the airlines and passengers. Single Till is the fairest mechanism of determining such tariffs and is strongly supported even by IATA- world’s premier trade body with 278 airline members from 117 countries and should have been used by the AERA for deciding the new tariff,” he told Sakal Times.

Exemptions from UDF & PSF (Security)
Following categories of passengers will be exempted from levy and collection of UDF & PSF (Security)
- Children under the age of 2 years.
- Holders of a diplomatic passport.
- Airline crew on duty, including sky marshals and airline crew on board for that particular flight.
- Persons travelling on official duty on aircraft operated by the Indian Armed Forces.
- Persons travelling on official duty for United Nations Peace Keeping Missions.
- Transit/transfer passengers
- Passengers departing from Indian airports due to involuntary re-routings. 

(This is the second part in the four part series on AERA Report on Pune airport submitted to DGCA. Read the first part here - Traffic movement at Pune airport for FY16-21 likely to cross 1 crore: AERA)

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