17-Oct-2012 9:49 AM

Indian air travel costs to be reduced with abolition of ADF at Mumbai and Delhi airports

India's Civil Aviation Minister Ajit Singh directed (16-Oct-2012) the Airports Authority of India (AAI) to infuse more equity in Mumbai International Airport Ltd (MIAL) and Delhi International Airport Ltd (DIAL) with the objective of abolishing the Airport Development Fee (ADF) at the airports from Jan-2013 and reducing the cost of air travel in the country. This follows a recent decision not to levy the ADF at Chennai and Kolkata airports. The Ministry noted, "Presently Rs. 200/ per domestic passenger and Rs. 1300/ per international passenger are being charged as ADF at Delhi Airport and Rs. 100/ per domestic passenger and Rs. 600/ per international passenger are being charged as ADF at Mumbai Airport. The expected financing gap in case of Mumbai International Airport Ltd. (MIAL) will be approximately Rs. 4200 Crore while in case of Delhi International Airport Ltd. (DIAL), it will be approximately Rs. 1175 Crore if the ADF is abolished with effect from 1st January 2013". Mr Singh added he has "asked AAI to infuse additional equity of approximately Rs. 288 Crore in case of Mumbai International Airport Ltd. (MIAL) against its 26% share in equity of MIAL. The balance in financing gap will have to be met by the Airport Operator/ Promoter (MIAL) through infusion of their share of equity". For Delhi, Mr Singh "asked the AAI to contribute equity share of approximately Rs. 102 Crore. It is noteworthy that when ADF was levied at Mumbai and Delhi Airports, AAI had taken the plea that it is not in a position to contribute more equity in view of its critical financial condition". As per the directions of Mr Singh the proposal regarding equity infusion by AAI will be soon submitted to AERA. [more - original PR

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