Covid-19: Airport association seeks sops, DGCA suggests waiver on cancellation charges

Source : Sify
Author : Sify
Last Updated: Fri, Mar 13th, 2020, 16:22:34hrs
Covid-19: Airport association seeks sops, DGCA suggests waiver on cancellation charges

The Aviation sector which has had an catastrophic predicament given the spotlight on the pandemic coronavirus on Friday set forth a set of waivers with aviation regulators such as the Directorate General of Civil Aviation (DGCA) and civil aviation secretary. .

This development arrives at a time when a letter signed by the Deputy Director General Sunil Kumar is doing the rounds. The letter asks airline to support passengers in tough times by "waiving off cancellation/reschedule charges providing any other incentive."

On Friday, A Private airport operators association pitched for a moratorium for revenue sharing for three months. It also sought for an additional levy - a corona surcharge, to cover for increased operating expenses. for deploying additional resources for screening international travellers.  

The operators also sought an airport alleviation package by AERA to facilitate growing operational expenses.

GMR group-led Delhi International Airport Pvt Ltd (DIAL) is required to share 45.99 per cent of its gross revenue with state-owned Airports Authority of India (AAI), the concession agreement with Mumbai International Airport Pvt Ltd (MIAL) requires the firm to part with 38.7 per cent of its revenue with the government agency.

The association of private airports operators (APAO) in its communication to Civil Aviation Secretary PS Kharola has explained that both aeronautical and non-aeronautical revenues have been affected due to flight cancellations by domestic and international airlines in the past few weeks. Further, many concessionaires such as food and beverage (F&B) service providers could default in the event of crisis continuing.

"Reduced passengers at airports have adversely impacted the non-aero revenues due to less sales at F&B and retail outlets. Non-aero concessionaires have already started asking for reduced revenue share or MMG which in turn will impact airport operators revenues," said APAO's letter.  

The APAO said that ensuring compliance with government advisories on screening of passengers has required airports to significantly beef up its manpower deployment at airports as well as make expenditure on various items like masks, sanitisers and floor cleaners.

"Given our focus on passenger convenience especially at such a juncture, significant time and effort is being spent by senior management at all these airports. Infrastructure placed by airports are of fixed nature and not flexible in response to such fluctuations in passenger demand. Corresponding financial burden is also of fixed nature in terms of interest outgo and various other expenses," the industry body has said.

The operators which include firms managing the country's main aviation gateways like Delhi, Mumbai, Hyderabad and Bangalore have pitched for provisioning of an "airport operator alleviation package" to meet its additional expenditure. APAO has argued that airports are facing immediate cash flow pressures in the wake of flights cancelled by airlines but it does not have flexibility to reduce operating expense given that they are fixed in nature.

It noted that while airlines can choose to cancel flights or relocate their aircraft to other markets to reduce operating costs, airports face immediate cash flow pressures with limited ability to reduce fixed costs and few resources to fund capacity expansion efforts for longer-term future growth.

"For privately held airports, the situation is even worse as they do not benefit from relief measures but are obliged to continue paying concession fees," said the airports grouping.

With coronavirus spreading to nearly 110 countries and India quarantining itself by suspending all visas except few categories, travel, aviation and tourism sectors have been worst hit. Many of the travel industry bodies have urged the government to provide a relief package to reduce the adverse impact.

In order to address the growing severity of the coronavirus and ensure sustainability of operations for airport operators, the private airports have suggested close cooperation mechanism between industry and policy stakeholders.

The operators have suggested to allow the levying of a nominal passenger facilitation charge as part of airline fares to cover increased operating expenses being incurred by the operators and provisioning of an "airport operator alleviation package".

"The government may decide certain routes or all routes for imposing an additional fee on air tickets," an airport executive said.

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*With inputs from IANS.