Context: Airport Economic Regulatory Authority in India has snubbed the revenue projections from non-aeronautical services of Adani-controlled Thiruvananthapuram airport in Kerala as a very miniscule amount.
About Airports Economic Regulatory Authority (AERA)
- AERA is a statutory body constituted under the Airports Economic Regulatory Authority of India Act, 2008 based on the recommendation of Naresh Chandra Committee.
- Function:
- The 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: Airports with annual passenger traffic of at least 35 lakhs.
- Note: For remaining airports, it is regulated by the respective airport operators with guidance from AERA.
- To monitor the set performance standards relating to quality, continuity and reliability of the services as may be specified by the Central Government or any authority authorized by it in his behalf.
- To determine the tariff once in five years and can amend the same in public interest, during the said period of five years.
Reason for setting up AERA:
- In 1997, Government of India formulated Airport Infrastructure Policy, which provided for private sector’s participation for improving quality, efficiency and increasing competition.
- As a result of this initiative, Greenfield airports in Public-Private Partnership came up in Bangalore and Hyderabad. This trend indicated growing competition and a requirement of level playing field amongst different categories of airports in future.
- The Airports Authority of India then performed the role of airports operator as well as the regulator, which resulted in conflict of interest.
- Thereafter the Government of India set up Naresh Chandra Committee to prepare the road map for civil aviation sector. The Committee recommended for setting up of an independent regulatory authority.
- Accordingly, the Airports Economic Regulatory Authority Act, 2008 established AERA.