The Civil Aviation Authority of Nepal ( CAAN ) has doubled ground handling charges and room rent at Tribhuvan International Airport, dealing a fresh blow to airlines already staggering under high operating costs. The fee hike is expected to mount pressure on carriers to raise airfares. CAAN has increased the tariff by 15 to 9,900 percent at one stroke. The increment has come at a time when airlines have been complaining that landing, parking and other charges in Nepal are relatively higher compared to other more sophisticated airports in Asia. Airlines said that CAAN has hiked service charges without any prior consultation and notification to them. The most affected by the revised service tariff is Nepal Airlines Corporation (NAC). NAC has been given the contract to provide ground handling services to all the foreign airlines except Thai Airways and Indian Airlines. The revised tariff will also hit Indian Airlines and Thai Airways hard, according to airlines operators. The charge for a certificate for self-handling and commercial handling charges and the renewal fee has been raised by 100 percent. Similarly, the room rent has been doubled. According to NAC, the revised tariff will mean an additional burden of Rs 400 million annually. Likewise, royalties have been raised by 50 to 100 percent, operators said. The tariff for the ground handling equipment parking yard has been increased by 9,900 percent to Rs 30,000 per sq m per year. “The increment on equipment parking yard charges has been raised to Rs 150 million annually from Rs 1.5 million,” said a NAC official. NAC officials said that the latest revision would further increase operating costs of airlines as the ground handling agency, NAC, will pass on the costs to airlines. “The airlines will pass it on to passengers, making an already high-priced ticket even more expensive.” Airlines are terming this unilateral increase unfair. “The unexpected tariff revision has worried all international airlines connecting Nepal as it will increase their operating costs significantly,” said Bharat Kumar Shrestha, chairman of the Airlines Operating Committee (AOC). “We were shocked to receive the increased bill of service from CAAN as we were not informed about the tariff revision.” All the airlines have been questioned by their headquarters over the dramatic hike, Shrestha said, adding that it was not a reasonable hike. “The hike considering the inflation rate is justifiable, but increasing the tariff two-fold is not justifiable.” On Aug 5, representatives of all the airlines led by the Board of Airlines Representatives in Nepal (BARN) and the AOC met with the director general of CAAN and urged him to reconsider the hike. CAAN officials have told BARN to submit a formal application. Meanwhile, CAAN has informed NAC that it should increase the existing royalty paid to CAAN to 15 percent when the ground handling contract is renewed in the beginning of 2014. Currently, NAC pays 10 percent royalty on its Rs 2 billion income generated from ground handling services. “We have not yet decided to increase ground handling charges for airlines, but the increased royalty we have to pay CAAN will force us to increase the tariff,” said a NAC official. A senior CAAN official said that the Airport Tariff Regulation 2067 was amended through a minister-level decision on March 13. “There won’t be significant changes and a few sections will be reconsidered,” the CAAN official added.
Posted on: Thu, 08 Aug 2013 04:36:19 +0000
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