Airport operators urge govt to remove cap on airfare, flyer capacity

• Follow

Civil aviation is one of the worst-hit sectors from the Covid-19. With flight bans, strict testing, and many movement curbs, air travel has witnessed a very severe impact. As the government began to allow the flights to resume, it placed a cap on the number of flyers and prices of tickets, etc.

Airport operators have now requested the Union government to remove the cap on ticket prices and flyer capacity. As per the operators, the restrictions hinder the passengers from traveling. It has also hurt the business of top airports which are privately held.

Losses incurred due to Covid

As per the estimates of CAPA-Centre for Aviation, airport operators in India in 2020-21, faced a consolidated loss before tax of Rs 7,000 crore compared to Rs 5,160-crore profit in 2019-20. CAPA-Centre for Aviation is a consultancy firm that provides information and market intelligence for the industry.

The suggestions were made during the meeting held last week between civil aviation minister Jyotiraditya Scindia and the chief executives of the top Indian airports.

The CEOs of the airports have urged the Union government to allow the resumption of international air travel without capping the passenger capacity, according to a report in the Business Standard.

All the top Indian airports are operated by private companies. Delhi and Hyderabad airports are owned by GMR. Adani Group owns the Mumbai airport along with six regional airports. Fairfax Group owns the Bengaluru airport.

Role of footfall in overall revenue

Passenger footfall is one of the determining factors of an airport’s revenue. Higher the number of passengers and the number of flights, the higher the landing and parking fees charged by the airport. As long as the caps are in place, air travel will never go back to what it was in the pre-pandemic era. In addition to that, 30% of an Indian airport’s revenue comes from the shopping and dining by passengers at airports. These fall under the category of non-aero revenue and are an important factor as far as the overall revenue is concerned.