Fliers may fund regulatory freedom

New Delhi: In a move that could move air travel costlier by making passengers indirectly fork out a regulatory cess, the Competition Commission of India (CCI) has recommended that Airports Economic Regulatory Authority (AERA) should impose a cess on airline companies and airport operators. The government is in the process of setting up AERA as an independent regulator for airports and a Bill to this effect is expected to be introduced in Parliament during the Budget session.
The Competition Commission has said that a provision for cess on airlines and airport operators should be included in the AERA Bill of 2006. The cess would make the regulator financially independent, the Commission has argued.
If the cess is imposed, airlines are sure to pass it on to consumers, considering that they have been imposing even a congestion surcharge recently. Morevoer, fuel surcharge is not being reduced despite fall in aviation turbine fuel (ATF) prices.
AERA is being set up as an independent regulator to fix up airport tariffs and to maintain standards at airports. At present, the Bill proposed the central government to fund the expenses of the airports regulator. CCI has argued that AERA should fund its expenses by levying a cess to maintain financial independence. The Commission has also called for creating a separate Fund for AERA.
05/02/07 Sunny Verma & G Ganapathy Subramaniam/Economic Times

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Categories: airports feb 2007, General Aviation feb 2007