Wednesday, April 27, 2011

Air tickets to get cheaper from Mumbai, but not Delhi


NEW DELHI: The Supreme Court on Tuesday ruled that the airport development fee ranging between Rs 100 to Rs 1,300 levied per passenger per trip at Mumbai, Delhi and other airports was illegal since it was not authorized by the Airport Economic Regulatory Authority (AERA). 
While this verdict will lead to lower fares in Mumbai, fliers from Delhi will continue to cough up the tax since the operator obtained AERA's permission to collect the sum in 2010. 

The order by a bench comprising Justices R V Raveendran and A K Patnaik will be welcomed by millions of flyers who have resented the levy as an unjustified burden particularly when airfares and prices in general have soared. They, however, will not get refunds, with the apex court ordering the airport development fee to be deposited withAirport Authority of India (AAI) for upgrading airports and passenger amenities. 

The bench held that the GMR-led Delhi International Airport Limited (DIAL) and GVK-managedMumbai International Airport Limited (MIAL) started collecting development fee from passengers transiting through the two airports from March and April 2009 merely on the strength of an authorization from the ministry of civil aviation, and without the requisite sanction from AERA.DIAL got the sanction from the airport regulator in 2010, while MIAL has not been permitted till date. 

Justices Raveendran and Patnaik prohibited MIAL from collecting airport development fee of Rs 100 per domestic trip and Rs 600 per international trip. The airport developer was permitted by the ministry to levy the fee till 2013. 

Though DIAL was permitted to collect Rs 200 per domestic trip and Rs 1,300 per international trip from passengers for three years since March 1, 2009, the court said it could have legitimately done so only from April 23, 2010, when it got AERA nod. 

The bench said it was still open for the petitioners to challenge the April 23, 2010 order of AERA allowing DIAL to collect the fee without determination of the rate. 

However, the court said both MIAL and DIAL cannot keep the money collected from passengers by them and would now have to account for the entire sum they got as development fee since 2009 to AAI. Delhi airport had handled 25 million passengers in the year 2009-10, while Mumbai airport in 2010 had seen a passenger traffic of 28.1 million. 

The airport developer in Delhi was allowed to collect the tax to cover a deficit of Rs 1,827 crore when the project cost was estimated to be about Rs 9,800 crore. But now with the project complete and the cost escalating to Rs 12,718 crore due to, among other reasons addition of the new domestic terminal 1D, the funding gap has gone up to Rs 3,481 crore. To cover the additional gap of about Rs 1,700 crore, DIAL has accordingly asked the Airport Economic Regulatory Authority (AERA) to be allowed the charge the ADF of Rs 200 and Rs 1,300 for four years and eight months from March 1, 2010, an extension of two years and eight months. 

Writing the judgment for the bench and partly allowing a petition filed by NGO "Consumer Online Foundation', Justice Patnaik said: "We declare that with effect from January 1, 2009, no development fee could be levied or collected from the embarking passengers at major airports under Section 22A of AAI Act, 1994, unless the Airport Economic Regulatory Authority determines the rate of such development fee." 

"We direct that MIAL will henceforth not levy and collect any development fee at the major airport at Mumbai until an appropriate order is passed by the AERA under Section 22A of the 1994 Act as amended by the 2008 Act," the Bench said.

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