Mumbai: International airlines launching new routes from Navi Mumbai International Airport (NMIA) will now be eligible for concessional landing charges following an amendment made this week by the Airports Economic Regulatory Authority of India (AERA) to an order passed in May. The move is set to incentivise airlines to launch international flights from Navi Mumbai. The airlines’ winter schedule, which commences on Oct 26, will test the effectiveness of the incentive.
The earlier aeronautical tariff order, passed by AERA in May this year, allowed concessional landing charges under a variable tariff plan (VTP) only when an airline launched a route new to the entire Mumbai Metropolitan Region (MMR). For instance, an airline launching a Navi Mumbai-Dubai flight would not get a concession in landing charges at Navi Mumbai airport because airlines already operate that route to Mumbai, the other MMR airport.
AERA, in an addendum issued on Sept 8, modified the eligibility criterion for the concession under the VTP from a “New Route in MMR” to a “New Route from NMI”. Under the revised provision, an international route will qualify as new if it is being introduced from Navi Mumbai, irrespective of whether the destination is already served from Mumbai’s other airport.
“Under the revised framework, new international passenger routes will receive a 100% waiver on landing charges in the first year. Short-haul routes of up to 5,000 km will receive a further 50% discount in the second year, while long-haul routes above 5,000 km will receive 50% and 25% discounts in the second and third years, respectively,” said NMIA in a press statement. “The framework also provides incentives for additional international frequencies, with discounts of up to 75%, and international freighter services, which will receive a 90% discount in the first year and 50% in the second year,” it added.
The amendment came about after NMIA wrote to AERA on Aug 4 about the lack of growth in its international air traffic. NMIA said that despite the commissioning of the full assets of international airside and terminal infrastructure, airlines have been unwilling to commence international operations from Navi Mumbai, resulting in underutilisation of the said infrastructure. “The airlines have attributed this reluctance to the quantum of Aeronautical Tariffs…NMIAL also highlighted the impact of the prolonged geopolitical conflicts resulting in higher fuel prices, airspace closure, insurance surcharges and depressed demand due to which carriers are more risk averse to committing international capacity at new airports,” said the AERA addendum order. “The VTP was provided to a new greenfield airport like NMIAL to incentivise airlines to commence/start their operations from this new airport,” AERA said in its order.
