Another major change in the Act, which reduces the power of AERA, is a change in the definition of categorization of airports.
New Delhi, Jun 27: Air Travel is yet a dream of every middle-class person. Indian government taking many significant initiatives for the development of Air Travel facilities. Now, taking this initiative further, Union Cabinet introduced an amendment in the AERA Act, 2018 which will increase the minimum passenger limit for airports.
The powers of the Airports Economic Regulatory Authority (AERA), with regard to setting user charges for passengers as well as airlines, just got eroded due to an amendment approved by the Union Cabinet.
This decision comes amid the government's ambitious drive to make aviation services affordable, even to those in the lower middle-income bracket.
The AERA was created to decide the parking and landing charges at major airports handling over 1.5 million passengers per annum.
Now with the threshold increased to 3.5 million passengers per annum for any airport to be classified as major airports, the number of airports under the AERA ambit would fall from 30 to 13.
After this amendment will be enforced by Parliament, the Civil Aviation Ministry will get power to bid out private airport projects on the basis of predetermined tariff and in such cases, the airport regulator will have no power to set or revise user charges. In Spite, the government will take advice or recommendations of AERA in setting such predetermined tariff. Thus, in an area where AERA had final powers, its role at best will become advisory.
The Amendment Act stated, “Notwithstanding anything contained in sub-sections (1) and (2), the Authority shall not determine the tariff or tariff structures or the amount of development fee in respect of an airport or part thereof, if such tariff or tariff structures or the amount of development fees has been incorporated in the bidding document, which is the basis for award of operatorship of that airport”.
Formally, AERA had the power to set tariffs for airports handling over 1.5 million passengers per annum. Now, it can set tariff for airports handling 3.5 million passengers per annum. As a result, around 17 airports will go out of the ambit of AERA’s regulation with regard to tariffs. Previously, AERA regulated 30 airports and will now regulate only 13.