Come July, Goa flights to cost more due to staggered hike in airport charges till FY 26
This, as Airports Economic Regulatory Authority (AERA) has hiked Dabolim/Goa International Airport’s aeronautical charges — that are levied on airlines, which accordingly decide airfares — and user development fees (UDF) that are paid directly by flyers.
Coupled with, anyway, high airfares due to record high jet fuel prices and a weak rupee, this will mean a costlier trip to one of India’s most loved holiday paradises.
According to AERA tariff order, the UDF for departing domestic and international passengers will rise from the present Rs 301 and Rs 604 (taxes extra) respectively to Rs 375 and Rs 695 from July 1, 2022, to March 31, 2023. The UDF will be Rs 430 (domestic) and Rs 760 (international) between April 1, 2023, and March 31, 2024. In FY 24-25, the same will be 495 (domestic) and Rs 825 (international). And in FY 25-26, the charges will be Rs 570 (domestic) and Rs 900 (international).
The authority has decided to allow a one-time increase of 30% in domestic and international aircraft parking charges this fiscal starting from July 1, 2022, and an increase by 5% thereafter year-on-year till FY 2025-26.
The AERA’s Goa airport tariff order for the “third control period” (April 1, 2021, to March 31, 2026) says:“Airports Authority of India (AAI) is entitled to recover Rs 967.7 crore (from Goa airport). The present value of total projected aeronautical revenues based on the authority’s parking and UDF charges is Rs 752.3 crore, resulting in a net shortfall (under recovery) of Rs 215.4 crore. The authority has decided to carry forward the under recovery of Rs 215.4 crore to the fourth control period, with a view to not burden the airport users, who are already suffering from the Covid-19 pandemic’s impact, further with excessive tariff at this juncture, which shall act counterproductive to the revival of the aviation sector.”
The AERA had a tough balancing act as on the one hand are Covid-hit airlines that oppose any further hike in operating costs or UDF to ensure reasonable fares help people return to flights. And on the other are airport developers who need to sustain operations, incur capex amid the sharp drop in footfalls since March 2020.
The Federation of Indian Airlines (FIA, that has major Indian carriers as its members) had opposed the proposed hike at Goa. “It is in the interest of all the stakeholders that the proposed tariffs be reduced in order to encourage middle-class people to travel by air, which will help in sharp post Covid-19 recovery of the aviation sector.”
The AAI countered this by saying its “financial condition during the Covid-19 pandemic has deteriorated to a great extent”. “The AAI has incurred a loss of Rs 1,962 crore in FY 2020-21. It has resorted to borrowing from the market to finance its capital as well as opex (operational expenses). Although it is expected that the aviation sector is likely to bounce back to pre-covid level by FY 2023-24. But for AAI’s current survival, it is required to improve cash flows.”