COVID travel restrictions & health concerns have affected aviation revenue, leading to the extension of the development fee tenure in Mumbai.
All flyers from Mumbai boarding domestic or international flights will now continue to pay for the development fee for one more year. As per reports, an added tariff - ₹120 for domestic and ₹720 for international destinations - will extend until March 31, 2022. Earlier, this fee was supposed to be waived off on March 21, 2021 (Wednesday), however, has now been stretched given the affected aviation revenue given the coronavirus travel restrictions.
What's the news?
Initially in 2012, the Airports Economic Regulatory Authority (AERA) had permitted the Mumbai International Airport Ltd. (MIAL) to levy an overhead development fee of ₹100 and ₹600 from all outgoing, domestic and international flyers, respectively. This tax was charged to cover up the airport project's deficit financing of Rs 3,845 crore. Later in 2016, an additional amount was imposed to finance ₹518 crores for the metro project. Both of these were merged as development fee and were supposed to be levied until March 31, 2021.
However, the revenue of the aviation sector faced a major hit due to the outbreak of the coronavirus last year. An order issued by the AERA notes that commuter traffic fell by 76.4% and 91.9% for domestic and international flights, between April 2020 to March 2021. While several reasons have been mapped for this dip including travel restrictions and health concerns, AERA has granted an extension to MIAL to continue the development cess and collect the deficit amount.
As confirmed by the Airports Authority of India, as of March 31, 2020 (last year), Mumbai Airport was yet to collect ₹524.6 crores under the Project DF and ₹102.7 crores under the metro DF. Meanwhile, reports have highlighted that the decision of the development will be reviewed this year in December, based on the reports of an independent auditor appointed by the AAI.