INDIA BUSINESS WORLD - APRIL 2007
The Month that was ...

AIRLINES PLAN COURT ROUTE TO EASE DECONGEST CESS

Private airlines plan to battle out the congestion surcharge issue in the courts. With pressure from the government to withdraw the Rs 150-congestion surcharge, airlines want to explain to the courts their position on the matter when the PIL comes up for hearing in Delhi High Court for hearing next month.

"Majority of the airlines have written to the DGCA (Directorate General of Civil Aviation) that they are unable to withdraw the surcharge. We will explain to the court why the surcharge was imposed," said Kingfisher Airline chief Vijay Mallya.

Following a PIL, the High Court had asked the civil aviation ministry to explain why the airlines have decided to impose the congestion surcharge. State owned Indian is the only carrier which has not imposed the congestion surcharge.

Two other private carriers, Air Deccan and Paramount, have decided to withdraw the surcharge and include it as part of the basic fare. With government openly showing its displeasure on airlines charging congestion cess, most carriers agree that if the surcharge remains, it has to be under a different head.

However Mr Mallya reiterated that passengers have to bear the cost of congestion in the airports. "Once the congestion in the Delhi and Mumbai airports eases, airlines would be happy to withdraw it," he added.

Due to the congestion over the major metros, government has not allowed additional flights out of these cities in the summer schedule. Mr Mallya made a strong plea for having two airports in all major cities across the country.