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Deccan joins the gang; airlines refuse to roll back

Despite calls by the aviation minister Praful Patel to withdraw the Rs 150-congestion charge, airlines have stuck to their position, reports Ranju Sarka.

india Updated: Dec 09, 2006 20:15 IST

Airlines have turned belligerent. Despite calls by the aviation minister Praful Patel to withdraw the Rs 150-congestion charge, airlines have stuck to their position. On Saturday, Air Deccan joined the other airlines in imposing a new congestion surcharge of Rs 150. But there's a difference.

This leaves only state-owned carrier Indian to impose a surcharge. Interestingly, even Paramount Airways, which doesn't fly to Delhi and Mumbai, has imposed a surcharge (it flies to Bangalore, where there's congestion on the runways).

"'It's a loud message: fix the infrastructure and stop talking. Why can't we train our air traffic controllers so the airports can handle 50 flights in an hour than just 30 today, or build additional parking slots,"said Brady.

Airlines loose Rs 2,500 for every minute an aircraft hovers over an airport, waiting in a queue to land. That is if the aircraft is a Boeing or an Airbus. If it's the smaller turboprop ATR, the cost is about Rs 750 a minute.

Indian carriers together do around 1200 flights a day. Half of them circle over airports for, typically, 30 minutes every day, say experts. Thus, the daily losses on account of congestion of airports, is around Rs 4.5 crore. Or, airlines are losing Rs 135 crore in a month just on account of congestion.

But is the surcharge business going out of control? Tomorrow, if airlines' labour costs go up, will they levy a labour surcharge? They can as they enjoy the pricing freedom. But why should someone flying say, Agra to Jaipur pay a surcharge? If all airlines are imposing a charge, are we seeing a cartel functioning?

"What we are arguing about is a nomenclature. The reason we have levied a surcharge is because a surcharge doesn't attract commission. By nature, it's non-finite and temporary in nature," said Kingfisher Airlines CEO Vijay Mallya at a press conference on Friday, defending the levy of congestion surcharge.

"On a Mumbai-Delhi flight, Rs 150 doesn't cover the cost of congestion. The cost could be Rs 1,000. What we are doing is averaging out (the loss across sectors), as we can't possibly charge Rs 1,000 as congestion surcharge," added Mallya while justifying the surcharge across sectors.

Mallya also argued that if you add surcharge to the basic fare, the absolute fare goes up, which can skew the comparisons in the airline distribution systems. The airline, which includes the surcharge in the fare, will be at a disadvantage vis-à-vis an airline that doesn't have a surcharge built into the fare.

The airlines may have a point (it perhaps also reflects their desperation to reduce their increasing losses), but these are some of the issues the new airport regulator may want to take up in the larger interests of the travelling public.

First Published: Dec 09, 2006 20:15 IST