Annexure II - AERA

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NERA [ C0 I10 ITl ic COfl
NERA t:COIIOlJ1IC COllsul:in9 activities from the regulatory till (e.g. UK, Ireland, etc.). Therefore, with the term "single till", we refer also to those approaches in which some non-aeronautical activities are excluded from the regulatory till. Under a single till approach, revenues that airport is allowed to receive from aeronautical services (defined as "allowed revenues") are calculated as difference between (i) total allowed costs (i.e remuneration on capital, depreciation and opex, related to both aeronautical activities and non-aeronautical activities included in the regulatory till) and (ii) revenues from nonaeronautical activities included in the regulatory till. Dual till approach Under a dual till framework, only those activities in which airport has market power (generally, those services which rely on "bottlenecked" facilities) are considered in tariff calculation. Under this approach, allowed revenues are assessed considering exclusively allowed costs (i.e remuneration on capital, depreciation and opex) associated with aeronautical activities. Revenues and costs of non-aeronautical activities are not taken into account in setting regulated tariffs. Hybrid till approach Annexure II-B Under a hybrid till framework, the airport cost basis is determined based on a combination of the single till and the dual till approaches. A hybrid till regime may be structured in a variety of ways. For example, a hybrid till framework may prescribe that costs to be considered in tariff determination are exclusively costs associated with aeronautical activities and that a predefined percentage of non-aeronautical revenues is used to defray the cost base for charges. Alternatively, a hybrid till framework may prescribe that the regulatory till includes both aeronautical activities and a predefined percentage (e.g. 50%) of non-aeronautical activities; this implies that aeronautical costs are reduced of an amount equal to the predefined percentage of the commercial margin (calculated as difference between non-aeronautical revenues and nonaeronautical costs, including remuneration on capital, depreciation and opex) that accrues to the airport. CP No. 9/2013-14/T-12023(14)/1/2012- Tariff- Vol - III Annexure II-B Page 29 of 51 12
Page 1 and 2: Annexure II-B CP No. 9/2013-14/T-12
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Annexure II - AERA

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