Annexure II - AERA

NERA
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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
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