MIAL cannot claim share in profit made by airlines: HC

In June this year, MIAL decided to charge fees on the ‘selling price’ of the food items.

The Bombay High Court has held that the Mumbai International Airport Limited, the operator of the city’s international airport, is bound to act in “public interest,” and has no right to make claims to a share in the profits, if any, made by the airlines.

In June this year, MIAL decided to charge fees on the ‘selling price’ of the food items. (HT PHOTO)

The court has also upheld a plea filed by the federation of Indian Airlines (FIA)— an association of private airlines such as GoAir, IndiGo and SpiceJet, challenging MIAL’s decision to levy a charge on the selling price of food items sold by them on board the aircrafts.

As per the plea, while the airlines already pay a 13 percent fee to MIAL, the same is calculated on the ‘cost price’ of the food items. However, in June this year, MIAL decided to charge fees on the ‘selling price’ of the food items.

Thus, FIA approached HC claiming that MIAL’s move was arbitrary and illegal.

FIA’s counsel, senior advocate Janak Dwarkadas, argued that only the Airports Authority of India had the power to make decisions on non-aeronautical charges, and that it could not transfer such powers to MIAL.

It also argued that it wasn’t interfering with the Airlines’ right to fix sale prices. Besides, it said, it offers certain “facilities and privileges to airlines and passengers, and thus, has a right to seek returns.”

HC however, dismissed MIAL’s arguments saying that MIAL, in the “garb of recovering the airport levy, was demanding a share in the income of the airline operators.”

HC said that MIAL had entered into the contract for the upgardation and modernisation of the airport of its own accord and that it must act in public interest.