What’s in the news?
- The Union Ministry of Civil Aviation has declared the Srinagar airport as a “major airport” under the Airports Economic Regulatory Authority Act, 2008 (AERA).
- The move will allow the AERA to determine the tariff, including the development fee and passenger service fee, for aeronautical services at the Srinagar airport.
- The Centre designates an airport as a major airport if it crosses a particular volume of annual passenger traffic.
- Previously, the Airports Authority of India, a body under the Ministry of Civil Aviation, would determine the traffic for Srinagar airport.
Airports Economic Regulatory Authority of India (Amendment) Bill, 2021
- In the last monsoon session, Parliament passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2021.
- The Bill seeks to broaden the category of airports for which the Airports Economic Regulatory Authority (AERA) of India can determine tariff by amending the definition of major airports.
Why has the definition of a major airport been amended?
- The AERA regulates tariffs and other charges for aeronautical services rendered at ‘major’ airports.
- Under the AERA Act, 2008, a major airport is one which “has, or is designated to have, annual passenger throughput in excess of three-and-a-half million or any other airport as the Central Government may, by notification, specify”.
- However, it does not provide for determination of tariff for a group of airports.
- The Amendment Bill has amended the definition of a major airport to include “a group of airports” after the words “any other airport”. The government hopes the move will encourage development of smaller airports and make bidding for airports with less passenger traffic attractive.
- It plans to club profitable airports with non-profitable ones and offer them as a package for development in public-private partnership mode to expand connectivity.
Was there a need to amend the AERA Act?
- The Airports Authority of India (AAI) awarded six airports — Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram and Guwahati — for operations, management and development in public private partnership mode in 2019.
- Later that year, the AAI Board approved leasing of another six airports — Bhubaneswar, Varanasi, Amritsar, Raipur, Indore and Tiruchi — for undertaking operations, management and development in public private partnership mode.
- The Ministry of Civil Aviation plans to club each of these airports with nearby smaller airports for joint development. The move follows Finance Minister Nirmala Sitharaman’s Budget Speech this year, in which she said the government planned to monetise airports in tier-2 and tier-3 cities.
How did AERA come into existence? What tariffs does it determine?
- The AERA Act was enacted in 2008 and an independent economic regulator, i.e., the AERA was established in 2009 for determining the tariff for aeronautical services rendered at major airports.
- For the remaining non-major airports owned by AAI, the Ministry of Civil Aviation approves the charges for aeronautical services.