Domestic departures will now cost ₹770, up from ₹506, while international departures will see a jump from ₹1069 to ₹1540.
Thiruvananthapuram International Airport (X)
A brewing controversy surrounds the Thiruvananthapuram International Airport (TRV) as the Airport Economic Regulatory Authority (AERA) approved a revision of various charges, raising concerns about its impact on passenger footfall and airline operations.
Effective from 1 July, 2024, and running till 31 March, 2027, the hike encompasses landing charges, parking charges, and most significantly, the user development fee (UDF).
However, the airport operator (Adani Group) defends the revised rates, stating that the increase is necessary to fund a series of developmental activities planned for the airport. The operator emphasizes that the additional revenue generated from the higher charges is crucial to balance the expenditures associated with these enhancements.
The UDF hike has drawn the most criticism. Domestic departing passengers will now pay ₹770, up from ₹506, while international departures will see a jump from ₹1069 to ₹1540.
Even arriving passengers will be charged – ₹330 for domestic and ₹660 for international. These rates will be applicable until 31 March, 2025, with further increases scheduled from 1 April, 2025, to 31 March, 2026, and again from 1 April, 2026, to 31 March, 2027.
An excerpt from the Tariff Card of AERA
Critics argue that the increased UDF will deter passengers from choosing TRV as their travel destination, leading to a potential decline in passenger footfall.
This, in turn, could influence airline companies to reconsider their operations at the airport due to the anticipated decrease in demand.
The overall cost of flying to Thiruvananthapuram is expected to rise, which might discourage passengers from opting for flights that connect through or terminate at the airport.
Moreover, there are concerns that passengers may seek alternatives, favoring other airports in the state such as Kochi or Kozhikode, where the overall travel costs might be lower. This shift could further reduce Thiruvananthapuram’s competitiveness and lead to a redistribution of passenger traffic across Kerala’s airports.
While Cochin International Airport levies a UDF of ₹570 for international passengers and ₹270 for domestic passengers, Calicut International Airport levies ₹720 and ₹430 respectively.
Among the four international airports, Kannur International Airport levies the highest UDF from international passengers – ₹1680. From domestic passengers, it levies ₹750 as UDF.
It is under Rule 89 of Aircraft Rules, 1937 that UDF is levied at the Indian airports. It is collected as a measure to increase revenues of the airport operator and to bridge any revenue shortfall so that the airport operator is able to get a fair rate of return on investment. The quantum of UDF varies from airport to airport.
At the same time, the Federation of Indian Airlines in a statement to AERA on the tariff card, highlighted that the proposed UDF charges on disembarkation should be reviewed as this increase in total flight costs to Thiruvananthapuram could discourage passengers from choosing to fly there.
The airport operator is of the stance that considering the potential demand and operational requirements, expansion activities are being planned. It also highlighted that it is mobilising investments of approximately ₹4,000 crore.
The other aspect being pointed out is that generating money through such revision of existing rates is essential as the TRV has been incurring losses since privatisation.
Landing charge hike
It is learnt that the Thiruvananthapuram Kerala International Airport Limited (TKIAL) owned by Adani Airport Holdings Limited incurred losses in 2022 and 2023 fiscals. Also, TKIAL is likely to incur losses of ₹100 crore in the 2024 fiscal.
It has also been intimated to the AERA that by the TKIAL that, “the existing debt of the company is based on cash flow assumptions including full recovery of the aggregate revenue requirement. In case it does not happen, the credit profile of the company will further erode and it will have cascading impact leading to higher cost of debt.”
According to Thiruvananthapuram MP Shashi Tharoor, such decisions can have a negative effect on the airport’s growth and development. Protesting the unjustified hike in the UDF and other airport charges, he also sent a letter to the Union Minister for Civil Aviation Kinjarapu Ram Mohan Naidu.
In the letter, Tharoor highlighted that the decision to hike the rates have taken place without any prior public consultation or discussion with stakeholders.
Parking charges of aircrafts
“There is no doubt that this steep hike in costs will render TRV a much less attractive option for both airlines and passenger, particularly given the considerably lower rates being offered by the nearest competing Cochin International Airport,” Tharoor said.
Echoing the same, Rajya Sabha MP John Brittas also approached the Union Minister Ram Mohan Naidu.
Brittas alleged the airport operator is primarily focused on boosting profits by imposing extra charges on consumers, which will have a detrimental effect on the airport’s long-term viability and reputation.
At the same time, public opinion is divided, with some travellers expressing frustration over the higher costs, while others understand the need for infrastructure improvements. The allegation that the airport operator is prioritising profit over consumer welfare adds another layer of complexity to the issue.
Sources close to the airport remarked that as the new tariff rates take effect on 1 July, the real impact on TRV will unfold over time.
“The balance between necessary development and maintaining passenger and airline satisfaction will be critical. Monitoring passenger numbers and airline activity in the coming months will provide a clearer picture of whether the revised rates achieve the intended financial stability without compromising the airport’s attractiveness as a destination,” said a source to South First.
(Edited by Shauqueen Mizaj)
Jun 30, 2024
Jun 29, 2024
Jun 29, 2024
Jun 29, 2024
Jun 29, 2024
Jun 29, 2024
