The tariff hike at the Delhi airport would result in a 4.9% and 7.8% increase in travel cost for international and domestic passengers respectively in the first year (May 2012-May 2013), the International Air Transport Association (IATA) has said.
The Airports Economic Regulatory Authority has cleared a 346% hike in Delhi airport charges for two years, which came into force from May 15. IATA said the hike would make it the world’s most expensive one.
The increase in travel costs for passengers, IATA said, will lower demand in 2012-13 by 6% and 10.4% among international and domestic passengers respectively.
“This would create a significant negative economic impact on the travel and tourism industry as well as the local economy. Airlines alone would suffer from foregone revenue of $895 million during 2012-14 from their operations to and from Delhi,” it said.
IATA said one way to mitigate the negative impact was to channel part of the 46% revenue share (up to $766 million during 2012-2014) that Airport Authority of India receives from Delhi International Airport Limited back to airport users for offsetting the impact of aeronautical charge increases.
IATA is an international trade body that represents around 240 airlines, comprising 84% of the total air traffic.