Airports Economic Regulatory Authority of India (Amendment) Bill, 2019 20/07/2019 – Posted in: Daily News – Tags: Airport authority of India
AIRPORTS ECONOMIC REGULATORY AUTHORITY OF INDIA (AMENDMENT) BILL, 2019
For: Preliminary & Mains
Topics covered: About the bill, Why was AERA created, Role of AERA
News Flash
The Rajya Sabha passed a bill allowing the AERA to bid out any new airport at a pre-determined tariff structure.
- 16 airports will be in the purview of Airports Economic Regulatory Authority of India (AERA).
- Currently, there are 32 major airports with an annual capacity to handle fifteen lakh passengers come under the purview of Airports Economic Regulatory Authority of India.
Amendment
- The definition of major airports would be changed to any aerodrome which has or is designated to have an annual passenger capacity of thirty-five lakh.
- It bill amends the Airports Economic Regulatory Authority of India Act, 2008.
- The Act established the AERA.
- The Bill adds that AERA will not determine: (i) the tariff, (ii) tariff structures, or (iii) the development fees, in certain cases.
Airports Economic Regulatory Authority of India
The AERA is a regulator that has the powers to set the tariffs charged at airports.
Under the Act, AERA is responsible for determining:
(i) the tariff for aeronautical services at different airports every five years
(ii) the development fees of major airports
(iii) the passengers’ service fee.
Why was AERA created?
- A few years back, private players started operating civilian airports.
- Typically, airports run the risk of becoming a monopoly because cities usually have one civilian airport which controls all aeronautical services in that area.
- To ensure that private airport operators do not misuse their monopoly, the need for an independent tariff regulator in the airport sector was felt.
- Consequently, the AERA Act, 2008 was passed which set up AERA.
What is the role of AERA?
- AERA regulates tariffs and other charges (development fee and passenger service fee) for aeronautical services (air traffic management, landing, and parking of aircraft, ground handling services) at major airports.
- Major airports include civilian airports with annual traffic above 15 lakh passengers.
- In 2018-19, there were 32 such airports.
- As of June 2019, 27 of these are being regulated by AERA (AERA also regulates tariffs at the Kannur airport which was used by 89,127 passengers in 2018-19).
- For the remaining airports, tariffs are determined by the Airports Authority of India (AAI), which is a body under the Ministry of Civil Aviation that also operates airports.
Source: The Hindu
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