Airport Economic Regulatory Authority Amendment Bill, 2021

July 30, 2021

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In News

Recently, the Lok Sabha has passed the Airport Economic Regulatory Authority (AERA) Amendment Bill, 2021.

About

The Bill was first introduced in March 2021, and was subsequently referred to a parliamentary panel, which approved it without any changes.
It seeks to amend the Airports Economic Regulatory Authority of India Act, 2008.

Key Provisions

It will allow AERA to regulate tariff and other charges for aeronautical services for not just major airports with annual passenger traffic of more than 3.5 million, but also a group of airports together.
- Currently, the airport sector regulator determines the tariff of a single airport and the amendment will allow for tariff fixation of more than one airport.
It proposes to modify the definition of a major airport to include a group of airports under the AERA Act 2008.
It aims to pair the smaller non-profitable airports with profitable airports as a combination/package to bidders to make it a viable combination for investment under PPP mode.

Image Courtesy: BS

Significance

This move is also likely to help in expanding the air connectivity to relatively remote areas and as a result, expediting the UDAN scheme.
It will pave the way for the privatisation of a small loss-making airport by clubbing it with a larger airport.

Concerns

Lack of clarity in the bill on the criterion for deciding which airports will be clubbed together to qualify under ‘a group of airports’ definition.

Airports Economic Regulatory Authority

With the advent of private players in the airport sector in 2006, there was a risk of monopoly by them. To counter this, the Airports Economic Regulatory Authority of India was established in 2008 under the AERA Act.
Before AERA came into existence, the Airports Authority of India, functioning under the civil aviation ministry, was in charge of monitoring services at airports.
Several committees had pointed out a conflict of interest since AAI is also a regulatory body.
Functions: To determine the tariffs and other charges( capital expenditure and passenger service fee) for the aeronautical services at major airports.

Source :LM