The Airports Council International (ACI) Asia-Pacific has written to Civil Aviation Minister Hardeep Puri, seeking relief measures in wake of the COVID-19 pandemic which is posing a series threat to the financial sustainability of the airport industry. In the letter, the ACI has stated that the Asia-Pacific suffered the highest impact with the passenger traffic volumes down by 24 per cent in the first quarter due to the coronavirus outbreak.
The ACI Asia-Pacific said that aeronautical revenues from airport charges paid by the airlines and the passengers and commercial revenues were instrumental to keep the operations going but due to the outbreak, both the revenue streams were under serious threat. It said that alleviating the collection of airport charges from airlines and passengers was not conceivable.
The body for airport operators said that the direct pressure on airport operating expenditure would be unbearable to maintain the current staffing and service levels. It said that the request to alleviate the collection of airport charges in the context of the COVID-19 outbreak was made without keeping in view the "fragile financial sustainability" of airport operators.
'Airports must also continue to meet their capital expenses obligations'
"Airports must also continue to meet their capital expenses obligations as they remain characterized by predominantly high fixed costs necessary for maintaining and operating the infrastructure components of the airport, such as runways, taxiways, aprons, parking stands and terminal buildings. Unlike aircraft, these are not movable assets.
"Consequently, airports must continue to be able to collect both aeronautical and nonaeronautical revenues from their users and end-users. Making requests to alleviate the collection of airport charges in the context of the COVID-19 outbreak is ill-advised and incognizant of the fragile financial sustainability of airport operators," the ACI wrote.
Keeping in view the predicament faced by the airport operators, the ACI said that alternative relief measures to support the industry should be explored and urged the government to reduce airport taxes on per passenger basis and consider to waive concession fees on a case-by-case basis.
"... Reduce airport taxes applied on a per passenger basis, that by ICAO definition, are not related to the provision of airport services or to the financing of airport infrastructure development. This would also incentivise passenger confidence to travel. The reduction of airport charges, on the contrary, is not always passed through to passengers to reduce the price of the ticket," the ACI said.
Indian aviation sector takes a hit due to coronavirus outbreak
The aviation sector in India and across the world has been severely hit by the coronavirus outbreak with hundreds of flights being cancelled due to the restrictions and cancellation of visas by several countries. India has also suspended all visas, except for a few categories such as diplomatic and employment-related till April 15 in view of the outbreak.
The Directorate General of Civil Aviation (DGCA) has directed the airlines to issue waivers on rescheduling and cancellation, following which domestic carriers in the country like IndiGo and Spicejet has announced zero change fees on existing bookings for travel from March 12.