Airport Economic Regulatory Authority Amendment Bill, 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