New Delhi, July 19 (IANS) The government on Tuesday said that future tariffs at all airports will be calculated on a “hybrid till” basis.
According to Minster of State for Civil Aviation Jayant Sinha, the “hybrid till” model will be used to ensure uniformity and level playing field for all airport operators.
“As per the National Civil Aviation Policy (NCAP), 2016, to ensure uniformity and level playing field across various airport operators, future tariffs at all airports will be calculated on a ‘hybrid till’ basis, unless otherwise specified for any project being bid out in future,” the minister informed parliament.
“It is also provided that 30 per cent of non-aeronautical revenue will be used to cross-subsidise aeronautical charges,” Sinha said in a written reply to a question in the Rajya Sabha during the question hour.
The “hybrid-till” model is used to ascertain aeronautical charges at airports. The model permits airport operator to include a portion of its income generated through non-aeronautical side of activities with those of aeronautical ones to calculate the total earnings.
The operator generates revenue by charging aeronautical activities such parking, housing and landing (PHL) of aircraft. It also earns revenue from non-aeronautical streams like duty free shops, food and beverages (F&B) outlets, vehicle parking and advertisements.
Based on the total earnings from the “hybrid-till” model, aeronautical rates are then decided by Airports Economic Regulatory Authority (AERA).
However, under a “single-till” model, earnings garnered through aeronautical and non-aeronautical activities are added together to form the total income. This model is considered to be more cost effective for airlines, as airport charges constitute around 14-15 per cent of the total operational cost of a passenger carrier.
Last month, a global airlines’ association had raised concerns over a provision in the recently approved NCAP that allows for usage of “hybrid till” model to ascertain airport tariffs.
That time the International Air Transport Association (IATA) said that the usage of “hybrid till” model will make air travel more expensive in the country.