On August 2, 2019, Parliament passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019 which amends the Airports Economic Regulatory Authority of India Act, 2008. The new bill increases the threshold of annual passenger traffic for major airports to over 35 lakh from 15 lakh. It is increased as the number of air traffic passengers has been increased 117 million from 2008 to 345 million in 2019.
- Background: The Airports Economic Regulatory Authority of India (Amendment) Bill, 2019 was introduced in Rajya Sabha on July 12, 2019, by the Minister of State for Civil Aviation Mr. Hardeep Singh Puri and was passed on July 16, 2019. The Airports Economic Regulatory Authority of India Act, 2008 established the Airports Economic Regulatory Authority of India (AERA). AERA regulates tariffs and other charges for aeronautical services provided at civilian airports with annual traffic above 15 lakh passengers and monitors the performance standard of services across these airports.
- Definition: AERA Act defined a major airport as one with annual passenger traffic over 15 lakh, or any other airports as notified by the central government.
- Tariff determination: Under the Act, AERA is responsible for determining the tariff for aeronautical services at different airports every 5 years, development fees of major airports, and the service fee of passengers. It can call for necessary information to determine tariffs and perform any other tariff-related functions, including amending the tariffs if necessary in the interim periods.
- New provision: AERA will not determine the tariff, tariff structures, or development fees, in certain cases. These cases include those where such tariff amounts were a part of the bid document on the basis of which the airport operations were awarded. AERA will be consulted by the concessioning authority before incorporating such tariffs in the bid document, and such tariffs must be notified.
- Reason for amendment: The exponential growth of the sector has put tremendous pressure on AERA. Its resources are limited. If many airports come under the purview of AERA, it will not be able to perform its functions efficiently.
- Present Status: At present, there are 32 major airports with annual traffic above 15 lakh, and AERA regulates tariffs of 27 airports. As per the Bill, AERA will regulate 16 major airports whose annual traffic is above 35 lakh and the remaining 16 airports will be regulated by the Airport Authority of India. (AAI).
- Allocation to Mini-Airports: Rs 10,000 crore will be spent on mini-airports in tier II and III cities in the next four years.
About Ministry of Civil Aviation:
♦ Headquarters: New Delhi
♦ Budget Allocation 2019-20: Rs 4500 crore