As demand for air travel in India increases, so may the prices

As demand for air travel in India increases, so may the prices

  • The Airports Authority of India (AAI) has submitted a request to increase passenger service charges, specifically the security fees.
  • This will, in turn, lead to an increase in the prices of flight tickets.
  • The demand had been put in to recover the deficit of around ₹8 billion owed to the Central Industrial Security Force (CISF) by airport operators.

When the UDAN scheme came into existence, airfares took a dive and the demand for air travel exploded. And, why wouldn’t it? Plane tickets were essentially cheaper than train tickets. But, all good times must come to an end.

The Airports Authority of India (AAI) has put in a demand for a hike in passenger service fees after the Central Industrial Security Force (CISF) complained over unpaid dues from airport operators.

How are the prices going to increase?

As per the civil aviation ministry, they’re considering a marginal increase in the security charge. Their justification is that since there’s been an exponential growth in passengers, the current fees don’t fully cover the cost of security management.

Currently, the charge is of ₹130 and hasn’t undergone any change in 10 years. The proposal will hike it to ₹225.

It was argued that since security is a sovereign issue, ideally the government should provide the amount from its consolidated fund. But, at the finance ministry’s suggestion, that burden will now be shifted onto the passengers against the home ministry’s prerogative that such a move would increase prices.

What’s the link between airport operators and the CISF?

The security charges that are collected from the passengers are dropped into an escrow account, which then sends the money to the CISF. While they claim that there’s been a delay in payments, the airport operators state that the money just isn’t there to make the payments.

The deficit amount currently is almost ₹8 billion.

There’s a need for more security

All over India, there are 98 airports of which only 59 fall under the CISF. The point of contention lies in the fact that 26 of those come under the ‘ hyper-sensitive’ category.

The increase in the flow of passengers, thus, leads to an increase for security at these airports, especially in places like Delhi and Mumbai. Delhi has been pressed for payments by the CISF since, and just for that one airport, the deficit is of around ₹600 crores.

Considering that the whole point of the UDAN scheme was to increase regional connectivity by allowing the 'aam aadmi' to fly at reasonable prices, an increase in price doesn't align with that objective.