12% drop in flyers, govt to push for UDF review

NewDelhi:Amassive 12.4% slump in domestic passenger traffic in September—over the same month last year—has set off alarm bells in the government. Worried about the potentially disastrous impact it could have on already ailing airlines, the aviation ministry will ask the Airports Economic Regulatory Authority (AERA) to review airport charges as high user development fees levied on  passengers are being seen as a deterrent to flying.      "The user development fee (UDF), especially at Delhi airport, is quite high and needs to be reviewed. We will make a reference to AERA for that," said a highly placed source in the ministry.      The move comes within days of the ministry realizing that its order to scrap airport development fee (ADF) in Delhi and Mumbai may not translate into cheaper flying. Airport authorities and the AERA had warned that it could lead to higher UDF for flyers and an overall hike in aeronautical charges on airlines, which would be passed on to flyers.  FEAR OF FLYING  September 2011 saw 45.9 lakh flying within the country, this number fell to 40.2 lakh last month  Besides Kingfisher fiasco and AI bleeding, aviation ministry feels high airport charges deterring flyers  Delhi among costliest airports in the world; only airport to levy UDF on incoming passengers as well HEAVY COSTS  Onus on govt to keep India's aviation story afloat  New Delhi: The result of prohibitively expensive aviation turbine fuel (ATF), high airport charges and steep fares amid a slowing economy is seen to be behind the doubledigit fall in domestic traffic.      While September 2011 saw 45.9 lakh flying within the country, this number fell 12.4% to 40.2 lakh last month. Unless the government lessens the cost burden on flyers, India's great aviation growth story may see more turbulence in the days to come.      Airlines, foreign and domestic, consider Delhi among the costliest airports in the world and the most expensive one in Asia. It is also the only airport levying UDF on incoming passengers as well.      "Such high charges prevent traffic from growing and thus make it difficult for Delhi to compete with nearby Asian airports like Dubai or Kuala Lumpur in becoming a big regional hub. It's high time the government intervened," said an airline official.      The ongoing Kingfisher fiasco, and the burden of keeping Air India alive on thousands of crores of taxpayers' money, has made it clear that the government will have to improve the cost environment for airlines.      "Kingfisher and Air India may be suffering from mismanagement and lack of proper business model, but even airlines believed to be run professionally are struggling to survive. The price of ATF in India alone is enough to kill an airline," admitted a senior official.      The government has allowed airlines to import jet fuel and use oil companies' infrastructure, but these steps haven't gone very far. Aviation minister Ajit Singh has yet again asked the finance ministry to put ATF in the declared goods category so that it attracts a uniform low rate of sales tax across all states.