Section 13 of The Airports Economic Regulatory Authority of India Act, 2008
- (1)The Authority shall perform the following functions in respect of major airports, namely:--
- (a)to determine the tariff for the aeronautical services taking into consideration--
- (i)the capital expenditure incurred and timely investment in improvement of airport facilities;
- (ii)the service provided, its quality and other relevant factors;
- (iii)the cost for improving efficiency;
- (iv)economic and viable operation of major airports;
- (v)revenue received from services other than the aeronautical services;
- (vi)the concession offered by the Central Government in any agreement or memorandum of understanding or otherwise;
- (vii)any other factor which may be relevant for the purposes of this Act: Provided that different tariff structures may be determined for different airports having regard to all or any of the above considerations specified at sub-clauses (i) to (vii);
- (b)to determine the amount of the development fees in respect of major airports;
- (c)to determine the amount of the passengers service fee levied under rule 88 of the Aircraft Rules, 1937 made under the Aircraft Act, 1934 (22 of 1934);
- (d)to monitor the set performance standards relating to quality, continuity and reliability of service as may be specified by the Central Government or any authority authorised by it in this behalf;
- (e)to call for such information as may be necessary to determine the tariff under clause (a);
- (f)to perform such other functions relating to tariff, as may be entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act. 1[(1A) Notwithstanding anything contained in sub-sections (1) and (2), the Authority shall not determine the tariff or tariff structures or the amount of development fees 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: Provided that the Authority shall be consulted in advance regarding the tariff, tariff structures or the amount of development fees which is proposed to be incorporated in the said bidding document and such tariff, tariff structures or the amount of development fees shall be notified in the Official Gazette.]
- (a)to determine the tariff for the aeronautical services taking into consideration--
- (2)The Authority shall determine the tariff once in five years and may if so considered appropriate and in public interest, amend, from time to time during the said period of five years, the tariff so determined.
- (3)While discharging its functions under sub-section (1) the Authority shall not act against the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality.
- (4)The Authority shall ensure transparency while exercising its powers and discharging its functions, inter alia,--
- (a)by holding due consultations with all stake-holders with the airport;
- (b)by allowing all stake-holders to make their submissions to the authority; and
- (c)by making all decisions of the authority fully documented and explained.
Summary
- The Authority determines the tariffs for aeronautical services, development fees, and passenger service fees at major airports.
- When setting tariffs, the Authority must consider factors like capital expenditure, service quality, efficiency costs, and revenues from non-aeronautical services.
- The Authority cannot determine tariffs or development fees if they were already included in the bidding document used to award the airport operations, provided the Authority was consulted in advance.
- Tariffs are generally determined once every five years, but the Authority can amend them during this period if it is in the public interest.
- The Authority must act transparently by consulting with stakeholders, allowing them to make submissions, and fully explaining and documenting its decisions.
Practical examples
FAQ
1. How often does the Authority change the airport tariffs?
The Authority sets the tariff once every five years, but it can amend the tariff during those five years if it is appropriate and in the public interest.
2. Can the Authority ignore the public or airlines when setting prices?
No. The Authority must ensure transparency by holding consultations with all stakeholders and allowing them to make submissions before making fully documented decisions.
3. What happens if an airport's prices were already locked into its starting contract?
The Authority cannot determine the tariff or development fees if they were already incorporated in the bidding document for the award of the airport's operatorship, as long as the Authority was consulted beforehand.
Test yourself
Q1.Under Section 13 of The Airports Economic Regulatory Authority of India Act, 2008, what is the standard time period for which the Authority determines the tariff for an airport?
Q2.Under Section 13 of The Airports Economic Regulatory Authority of India Act, 2008, which of the following prevents the Authority from determining the tariff or development fees for an airport?
Q3.Under Section 13 of The Airports Economic Regulatory Authority of India Act, 2008, which of the following is a mandatory requirement for the Authority to ensure transparency?
Q4.Under Section 13 of The Airports Economic Regulatory Authority of India Act, 2008, which of the following is NOT listed as a factor the Authority must consider when determining the tariff for aeronautical services?