Newstrack

Air ticket cess to fund small airport revamp

Shaheen Mansuri - Mumbai

With the central government planning to fund the development of 35 non-metro airports through internal accruals, rather than taking the private funding route, some airline operators believe the government may consider its earlier decision of levying cess on air tickets.

The cess could be anything between Rs 50 - 100 per ticket. The estimated cost to fund the development of the non-metro airports is approximately Rs 4,662 crore.

Around 25.5 million domestic passengers and 22.4 million international passengers will be charged an additional cess every year if the proposal is sanctioned by the government.

Maintaining that the funds for the purpose will be raised through internal sources, a civil aviation ministry source explained that even China had imposed a cess for a temporary period for modernising its airports. "It is an international practice," said the official.

Says G R Gopinath, managing director, Air Deccan, "I don't espouse the government taxing air travellers for operating uneconomic airports. It's an infrastructure-related issue and should be addressed through public-private participation."

He added that uneconomic airports should be developed as low cost airport terminals and built along with industrial and information technology (IT) parks in the vicinity. "The collaboration will augur well both for the economic development of the region as well as for the aviation sector," Gopinath added.

An official from a New-Delhi based airline comments, "In a price sensitive market, where the operators are going through a tough period, increasing their sales target by reducing the ticket prices, an additional burden of Rs 100 will not be acceptable to passengers."

Although most airlines refrained from commenting on the issue since they are yet to get an indication from the civil aviation ministry, they feel that the government should first address the issue of poor infrastructure at Mumbai, Delhi and Bangalore airports.

"Low cost travel is a nascent industry, and if such a cess is levied, passengers will be burdened. If more and more taxes keep piling on to the ticket price, passengers might re-think travelling by air," said an airline official.

Cities like Mysore, Gulbarga, Shimoga, Raichur and Bijapur can be equipped with low cost airports by investing a Rs 17-18 crore each, but the burden should not be completely borne by the air travellers, feel many.