New Delhi, April 25th, 2012:
Delhi International Airport (P) Limited (DIAL) welcomes the revision in aeronautical charges promulgated by AERA. However, considering that the charges were stagnant for the last decade (since 2001), the revision of charges is much below our expectations. Tariff calculations show that the approximate increase in ticket pricing on account of passenger fee per pax, for the year 2012-13, works out to INR 290 on an average for domestic and INR 580 on an average for international. Delhi airport will compare favourably to other major global airports where passenger fees range between $ 25(INR 1300) to $ 30 (INR 1560) on an average, thus making a very soft impact on the passengers.
The current aero tariffs levied in Delhi are amongst the lowest in the world. Considering additional investments done as per the terms of the concession, including capacity building and new features are factored in; the tariff hike effective from 15th May, 2012 is less than half of requested increase and is therefore inadequate. DIAL is making losses due to delay in revision of aeronautical charges and significant airline over dues. Nevertheless, this increase will be a significant step in stemming the losses of DIAL and taking DIAL towards viability.
DIAL had sought a 24% return on equity and instead have been granted only 16%. Similarly, for quasi equity based return on refundable security deposits (RSD), DIAL has been granted nil return. These factors have contributed to the approved revision in aeronautical tariff not being in line with the expectation.
DIAL has delivered a world class 5.5 million sq. ft. integrated terminal besides other significant up gradations at IGI Airport in a record breaking 37 months and at a total cost of Rs. 12,857 crores. Apart from capital cost, the cost of operation and maintenance at Delhi Airport has been found to be amongst the most efficient in the world on a per unit basis. Delhi airport is Second Best Airport[i] in the world in the 25-40 million passengers per annum capacity, for service quality. We have also just been voted as the Most Improved Airport in the World besides being also awarded as the Best airport in India by over 12 million travellers in a recent Survey[ii]. DIAL has contributed almost Rs. 3000 crores as revenue share to Airport Authority of India till March 2012. NCAER, in its study[iii]on economic impact has highlighted the tremendous contribution of DIAL to the economy. DIAL contributes almost 0.5% of the GDP of the country and almost 13% of the GDP of National Capital Region. DIAL contributes to employment generation of over 1.5 million persons.
DIAL would like to reiterate that had the revision come into effect from the year 2009, as was originally envisaged, the percentage increase for airlines and passengers would have been far lesser.
The revised tariffs will be charged in the form of an enhanced Landing and Parking fee for aircraft and a User Development Fee (UDF) for passengers and will be applicable from May 15, 2012.
[i] Ranked by Airports Council International
[iii] Economic Impact Study by NCAER dated 20 April 2012
Delhi International Airport (P) Ltd (DIAL) is a joint venture company; comprising the GMR Group, Airports Authority of India, Fraport and Malaysia Airports Holdings Berhad. The project being developed by DIAL under Public Private Partnership has been given the mandate to finance, design, build, operate and maintain the Delhi Airport for 30 years with an option to extend it by another 30 years
About GMR Infrastructure Limited:
The Company is a Bangalore headquartered global infrastructure major with interests in Airports, Energy, Highways and Urban Infrastructure sectors. It has successfully employed the public-private partnership model to build a portfolio of high quality assets. The Company has 16 power generation assets of which 5 are operational and 11 are under various stages of implementation and 10 Road assets, of which 6 are operational and 4 are under construction. In the Airports sector, it has developed and commissioned the Greenfield International Airport at Hyderabad. The Company, besides operating the existing Delhi International Airport, has also built a brand new integrated terminal T3 which was commissioned in time for the Commonwealth Games in October 2010. It has also upgraded and is operating the Istanbul Sabiha Gökçen International Airport and has recently acquired the Ibrahim Nasir International Airport, Male. GMR Group is also committed to social development initiatives and executes these through its Corporate Social Responsibility arm, the GMR Varalakshmi Foundation which is present in 22 locations.
For Further details, please contact:
Mr. Saptarshi Sanyal
Head – Corporate Communications
Mr. Arun Bhagat
EVP & Group Head - Corporate Communications