By Abhijith Ganapavaram
April 30 (Reuters) - Private Indian airport operators
have warned that a government-directed 25% cut in landing and
parking charges could strain cash flows and debt servicing, with
no enforceable mechanism to ensure that airlines pass on the
benefit to passengers, according to a letter seen by Reuters.
* India's airport tariff regulator ordered
major airports to cut landing and parking charges by 25% for
three months for domestic flights, following directions from the
federal government, to offer relief to the country's airlines
that are under financial pressure from the Iran war.
* The Association of Private Airport Operators (APAO) said
in the letter that it supported the intervention but sought
urgent policy and regulatory support, citing traffic reductions,
revenue losses, cost escalation and operational risks amid
uncertainty over the evolving geopolitical situation.
* The Ministry of Civil Aviation, Airports Authority of
India (AAI) and APAO did not immediately respond to Reuters'
requests for comment.
* The order was issued without consultation with airport
operators, APAO said, adding that a uniform 25% reduction does
not adequately consider airports' domestic-international traffic
mix, creating significant revenue imbalances.
* The association sought deferment of revenue share or
per-passenger fee payments owed to AAI during the relief period
and proposed an upward revision in landing and parking charges
after the relief period to recover the shortfall.
* Aviation turbine fuel costs account for a much-larger
share of airline costs than landing and parking charges, the
letter noted.
* APAO asked the ministry to ask state governments charging
value-added tax on jet fuel above 5% to reduce it to 5% or
below.
* Adani Airports Holdings Ltd, a unit of Adani
Enterprises, is India's largest private airport
operator by number of airports, followed by GMR Airports
.