Indian airlines are not taking well Mangaluru Airport’s demand for fee increment.
Mangaluru, September 19,2022: South India’s Mangaluru International Airport has asked for a significant increase in its fee structure, which will directly impact the airlines flying there. Many Indian carriers, however, are not happy with this and have asked the airport to consider other non-aeronautical sources of income. But is the solution that simple?
Fee hike:
Mangaluru International Airport (IXE) in the South Indian state of Karnataka is the second-busiest airport in the state after Bengaluru airport (BLR). IXE sees regular flights not just within India but to the Middle East as well, and since 2020 has been managed by Adani Airports Holding.
And now, the airport is seeking an immediate increase of 49-74% in passenger, landing, and parking fees for the next five-year period to fund development activities. According to The Economic Times, Mangaluru Airport is also requesting permission to levy the user fee on both arriving and departing passengers — something not usually imposed on arriving passengers. According to the reports published in simpleflying.com
Airlines push back:
IXE’s request for a fee hike has not gone down too well with some Indian carriers, who say that the increase in charges will affect their recovery from COVID. The ET reports that the Federation of Indian Airlines (FIA), which includes IndiGo, SpiceJet, and Go First, said that IXE should consider non-aeronautical sources and cross-subsidize passenger fees and landing and parking charges for airlines. The airport’s tariff model allocates 30% of non-aero revenue to lower the burden on passengers and airlines. But tariff regulator Airports Economic Regulatory Authority of India (AERA) is suggesting that it looks at increasing other non-aero modes of revenue, including duty-free shops, restaurants, lounges, and car parking.
Limited scope:
However, it seems that Mangaluru airport could do little as of now to generate revenue from other sources. IXE is projecting its non-aero revenue between 2021 and 2026 to be around ₹40,00,000,00 ($5 million).
AERA notes that this figure is far too low when compared to other airports where non-aero revenue was at least 50% of the total expenditure incurred by the operators during the period. An increase in such revenue is directly related to the increase in non-aero areas in the terminal building.
