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Hyderabad airport passenger fee hike not enough: GMR

October 05, 2010 14:29 IST

GMR Hyderabad International Airport Limited is unlikely to post profit in the near future even after the proposed hike in the user development feeĀ  from Rs 340 to Rs 420 for domestic passengers and from Rs 907 to Rs 1,656 for international passengers, effective November 1.

In response to a representation made by GHIAL, the Airports Economic Regulatory Authority of India has proposed to increase the UDF charges. But the hike proposed by Aera is far short of what has been sought by GHIAL in its representation to Aera.

GHIAL had requested Aera to allow it to fix UDF charges at Rs 500 per domestic and Rs 2,825 per international departing passenger. Besides, it wanted to increase landing and parking charges by 10 per cent year-on-year till 2013 and charge Rs 4,000 per landing for aircraft with a capacity of less than 80 seats.

GHIAL is a public-private partnership project promoted by the GMR group (holds 63 per cent stake), Airports Authority of India (13 per cent), Andhra Pradesh government (13 per cent) and Malaysia Airports Holdings Berhad (11 per cent).

While allowing a hike in the UDF charges by Rs 80 and Rs 749 per domestic and international passenger, respectively, Aera said the 10 per cent increase in aeronautical charges could not be considered at present. However, in due course, it would prescribe the tariff which "may or may not translate into year-on-year increase of 10 per cent".

With regard to the levy of Rs 4,000 landing charges, Aera maintained that "this is purely a commercial decision of the airport operator.

The authority does not wish to be a party to this decision". At present, aircraft with less than 80 seats are fully exempted from landing charges.

GHIAL projected that if there was no hike in UDF and aeronautical charges and the landing charges were also not levied, it would incur a net loss of Rs 980.8 crore (Rs 9.8 billion) in 2010-11, Rs 764.53 crore in 2011-12 and Rs 453.96 crore (Rs 45.3 billion) in 2012-13. The current five-year regulatory period ends by March 31, 2013.

On the other hand, if all the above measures were allowed to be taken, it would be able to post a profit after tax of Rs 311.04 crore (Rs 3.11 billion) in 2010-11, Rs 1,640.85 crore (Rs 16.4 billion) in 2011-12 and Rs 2,182.56 crore (Rs 21.8 billion) in 2012-13.

The PAT increases in tune with the growth in the passenger and cargo traffic.

Prashanth Chintala & B Krishna Mohan
Source: source image