Association of Private Airport Operators(APAO - AERA

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Association ofPrivate Airport Operators Response 10 A EllA 's Consultation Paper No. 32/2011-12 tit. 03 J(l1I 2012 Oil determination otAeronautical Tarittln resnect oflGI Alrnort. New Delhi 4.6 AERA's Tariff Guidelines, also stipulate a band of traffic for forecast mechanism, beyond which the impact of traffic is shared equally between the users and the airport operators. As DIAL did not specify such a band in its MYTP , the Authority has proposed a 5% band for the forecasted traffic. 21)th February 2012 4.7 As the risk for traffic movement beyond the band is borne by the airport operator, it is reasonable to base the determination of tariff as per airport operator's traffic forecast. If traffic forecast, which is significantly different from airport operator's forecast, is used to determine tariff, it may result in a loss of revenue to airport operator, especially when the actual traffic for the control period is in line with airport operators' forecast. 4.8 Conclusion: The traffic projection used by the Authority for determination of tariff is higher than the forecasts by DIAL and other reputed bodies such as AAI, ACI, ICAO and MOTT. The use of historical traffic data which increased from a lower base would result in overestimation of traffic forecast. The current macroeconomic scenario also suggests a slowdown in India's GDP growth which would have an adverse impact on traffic. Further, as the risk of traffic is primarily borne by DIAL, any deviation from the DIAL's forecast may result in an unfair loss to DIAL. Hence, APAO would request the Authority to kindly consider the traffic forecasted by DIAL for determination of tariff. We would further submit that the Authority should consider adopting a standardized methodology for determination of traffic at various airports. Page z ! of4!
5 Non Aeronautical Revenue Association ofPrivate Airport Operators Response to AEllA 's Consultation Paper No, 32/20//-/2 dt, 03 Jail 20/2 011 determination ofAeronautical Tarittln resoect of/G/ Airoort, New Delli! 5.1 The Authoritv has used "estimated non aeronautical revenue" for FY 2009-10 and FY 2010 - 11 while determining tariffs instead of the available actual and audited lIOn aeronautical revenue data (rom IGI Airport, 29th February 2012 5.2 The Authority's estimate of non aeronautical revenue for FY 2009 - 10 and FY 2010 11 is the maximum revenue for different non aeronautical services as calculated using the following approaches: a. "The non-aeronautical revenues for various revenue heads for 2008-09 to be considered as the base figure for forecasting the non-aeronautical revenues for FY 2009-10 and 2010-11, escalated by the historical passenger! cargo growth rates plus a certain %age increase due to higher penetration as may be applicable (as proposed by DIAL) for those years " b. "For 2011-12 to 2013-14, the base value of revenue arrived for 2010-11 to be projected based on the traffic growth plus a certain %age year on year increase due to penetration as per DIAL's estimate ". 5.3 On the basis of the above-mentioned approaches, the Authority arrived at the following numbers for non aeronautical revenue l6 : Year/ U.s in CI'OI'CS I Non Aerounutlcal Revenues under Scenarlo 1 Non Aeronnutienl Revenues under Seenurlo 2 Non Aeronautlcnl Revenues under Seeunrin 3 2009-10 605 605 495 2010-11 599 599 687 2011 -12 708 726 835 2012-13 772 810 986 2013-14 832 904 1146 5.4 The Authority has considered highest numbers from the above table for determination of tariff for 101 Airport. The rationale mentioned by the Authority in using the above methodology is "In line with the universally accepted principle that airports should strive to generate higher non-aeronautical revenu e and DIAL 's own objective of obtaining higher revenues through -r-concession under Joint Venture with the airport operator, it will only be fair ifthe higher ofthe figures in the above tables are used for present tariff determination purposes.... " 5.5 Consistency with SSA: As a general principle, the Authority has been consistent with the provision of the SSA: "...the provision of SSA should also be reconciled to the extent possible with the provisions ofthe Act. It is only where the provisions ofthe SSA are not consistent with the Act and cannot be reconciled thereto, a deviation may need to be made. " Also the Act states that the Authority shall determine the tariff for aeronautical services taking into consideration, among other things , the following 16 Source: Consultation paper Page 22 of41
Page 2 and 3: Association ofPrivate Airport Opera
Page 4 and 5: List of Abbreviations Association o
Page 8 and 9: 2 Background Association ofPrivate
Page 10 and 11: 1. 2. 3. 4. 5. 6. Auckland Internat
Page 16 and 17: SNo I 7. Airport Airport Xiamen Int
Page 18: Illustration on return to equity in
Page 21: 4 Traffic Forecast A ssociation ofP
Page 27 and 28: Association 0/ Private Airport Oper
Page 30: 8 Hypothetical Regulated Asset Base
Page 33 and 34: 9 Service Quality Association ojPri
Page 36 and 37: 11 Voluntary Retirement Scheme (VRS
Page 38 and 39: 12 CPI-X Association ofPrivate Airp
Page 40 and 41: 14 Conclusion Association oj' Priva
Page 42: 15 Appendix 1 Assoclation ofPrivate

Association of Private Airport Operators(APAO - AERA

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