Airport peak hour rates to cost passengers dearly

Excerpts from Power Breakfast on CNBC-TV18 Watch the full show » Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

The proposed doubling of airport charges during peak hours will mean passengers pay more. But CNBC-TV18 reports that they won't necesarrily be treated to uncongested airports.

Now, your airfare may soon become as complicated as your mobile telephone bill. Besides taxes, fuel surcharge and congestion cess, another charge could emerge after the higher airport charges that the government has proposed. The charge seems to be a way to disincentivise airlines from flying during peak hours.

But industry observers say this only means customers will pay more and airport authorities will earn more. Airlines will get nothing and it will not help in decongestion.The proposal also suggests cutting by half airport charges during non-peak hours. But airlines are unlikely to pass on the benefit to consumers.

Out of 650 flights that Mumbai and Delhi airports operate every day, over 60% fly during peak hours. That means 60 million people fly between 7am and 10am and between 6pm and 9pm. If the charge is levied, it will increase airlines' operational costs by 2-3%. That means a Rs 150-200 increase on peak-time fares.

At the moment, passengers pay almost Rs 1,225 in fixed levies and this will add 10% to them. It's unlikely to reduce your waiting time on the tarmac, but sure to make a wider hole in your pocket.

Industry experts say if the government really wants to cut congestion, it should place a moratorium on flying during peak hours. They also say that when the new runway in Mumbai is commissioned and the new Bangalore airport goes operational next year, delays will be minimised. So there seems to be liitle logic in levying such charges especially when airlines are trying to develop the market to stay afloat.