IGI airport's passenger fee increase to have minimal impact on airfares: Experts

The increase in passenger usage charge at the Indira Gandhi International Airport (IGIA) from December 1, 2018, will not have any material impact on the airfares or passenger traffic, industry experts said on Thursday.

"The hike in charges is only around two per cent of the average fare on the Mumbai-Delhi route. Thus, it will not have any material impact on the fares or the passenger traffic," Kinjal Kirit Shah, VP, Corporate Sector Ratings, ICRA told IANS.

According to Aloke Bajpai, CEO and Co-founder, ixigo: "The increase in UDF (User Development Fee) for flights from Indira Gandhi International Airport is nominal and will have minimal effect on domestic and international airfares."

"Growth in capacity and airlines announcing winter sales for the upcoming holiday season will curb any further increase in prices."

As per an order dated November 19 by Airports Economic Regulatory Authority (AERA), the Delhi International Airport Limited (DIAL), the firm which manages and operates the facility will be able to charge a passenger service fee at the rate of Rs 77 per departing passenger.

However, for passengers who have booked a ticket in foreign currency, the fee will be charged at $1.93.

Currently, DIAL levied current UDF at the rate of Rs 10 for domestic departing passenger and at Rs 45 for international departing passengers.

A GMR Group spokesperson on Wednesday said: "As per the current order UDF would be discontinued and instead Passenger Service Fees would be charged at Rs 77 per departing pax, with the exception of tickets issued against foreign currency (for which USD 1.93 would be charged)."

Sharat Dhall, COO (B2C), Yatra.com said: "The hike in user development fee for domestic and international flights from Indira Gandhi International Airport is expected to have a minimal impact as it translates to an increase of only about 1-2 per cent on an average domestic fare and even less on an International fare."

"Also, if the oil prices continue to remain stable, prices are not expected to rise further as there is capacity increase to match the increased demand. We expect the buoyancy in the domestic aviation market where we have seen a 20 per cent year on year growth, to continue unabated in the near to medium term."