(Amendment) Bill, 2021

R eference Division, LARRDIS, 2021

MEMBERS' REFERENCE SERVICE LARRDIS

LOK SABHA SECRETARIAT NEW DELHI

LEGISLATIVE NOTE

For the use of Members of Parliament NOT FOR PUBLICATION

No.25/LN/Ref./March/2021

THE AIRPORT ECONOMIC REGULATORY AUTHORITY OF INDIA (AMENDMENT) BILL, 2021

Prepared by Nuamhoikim, Assistant Research Officer and Shri V. Thomas Ngaihte, Additional Director (23034926) of the Lok Sabha Secretariat, under the supervision of Shri Pradosh Panda, Director (23035632/23035391) and Smt. Kalpana Sharma, Additional Secretary (23034845).

The Legislative Note is for personal use of the Members in the discharge of their Parliamentary duties, and is not for publication. This Service is not to be quoted as the source of information as it is based on the sources indicated at the end/in the context.

Reference Division, LARRDIS, 2021

THE AIRPORT ECONOMIC REGULATORY AUTHORITY OF INDIA (AMENDMENT) BILL, 2021

The aviation sector of India is one of the fastest growing in the world. India’s domestic traffic has more than doubled from around 61 million in FY14 to around 137 million in FY20, a growth of over 14 per cent per annum. From the third largest domestic aviation market, it is expected to become the third largest overall including both domestic and international traffic by the year FY251. The Airport Economic Regulatory Authority of India (Amendment) Bill, 2021, introduced in the Lok Sabha on 24 March 2021, provides for the establishment of Airports Economic Regulatory Authority to regulate tariff and other charges for the aeronautical services rendered at airport and to monitor performance standards of airports and other related matters. Objective  The airports, where currently the tariff potential is low and loss making are not expected to attract reasonable competitive bids.  Developing more number of airports through public-private partnership mode would expand air connectivity to relatively remote and far-flung areas. This approach would develop not only the high tariff volume profitable airports but also the low tariff volume non-profitable airports. (102 loss making airports for the FY 2018-19)- Annexure-I)  Therefore, the Government has decided to club or pair airports having profitable and non-profitable airport which could be offered in public-private partnership mode as a package to the prospective bidders. Background Airports Economic Regulatory Authority of India (AERA) was established on 12 May 2009 as a statutory body of Government of India. The Parliament of India enacted an Act called “The Airports Economic Regulatory Authority of India Act, 2008”. The provisions of the Act came into force from September, 2009.The Act envisages the establishment of a statutory authority called the Airports Economic Regulatory Authority to regulate tariff and other charges for the aeronautical services rendered at airports and to monitor performance standards of airports.

1 Economic Survey 2020-21 6

Reference Division, LARRDIS, 2021

Under the Act, “major airport” has been defined to mean any airport which has, or is designated to have, annual passenger throughout in excess of three and a half million or any other airport as the Central Government may, by notification, specify as such. However, it does not provide for determination of tariff for a group of airports. As on date2 there are 28 major airports in India, namely:- 1. Indira Gandhi International Airport, Delhi 2. Chatrapati Sivaji International Airport, Mumbai 3. Kempagowda International Airport, Bengaluru 4. Rajiv Gandhi International Airport, Hyderabad 5. Cochin International Airport, Kochi 6. Netaji Subhas Chandra Bose International Airport, Kolkatta 7. Chennai International Airport 8. Sardar Vallabhbhai Patel International Airport, Ahmedabad 9. Trivandrum International Airport, Thiruvananthapuram10. Calicut International Airport, Kozhikode 11. Chaudhary Charan Singh International Airport, Lucknow 12. Jaipur International Airport, Jaipur 13. Lokpriya Gopinath Bordoloi International Airport, Guwahati 14. Goa International Airport, Goa 15. Srinagar International Airport, Srinagar 16. Pune Airport, Pune 17. Dr. Babasaheb Ambedkar International Airport, Nagpur 18. Chandigarh International Airport, Chandigarh 19. Coimbatore International Airport, Coimbatore20. Mangaluru Airport, Mangaluru 21. Visakhapatnam Airport, Visakhapatnam 22. Devi Ahilya Bai Holkar Airport, Indore 23. Jay Prakash Narayan International Airport, Patna 24. Biju Patnaik International Airport, Bhubaneswar 25. Kannur International Airport, Kannur 26. Bagdogra Airtport, Bagdogra 27. Varanasi Airport, Varanasi 28. Amritsar Airport, Amritsar. Airport Authority of India (AAI) manages a total of 137 airports which include 24 International airports. Salient Feature Accordingly, the Airport Economic Regulatory Authority of India (Amendment) Bill, 2021 proposes to amend the definition of “major airport” so as to extend its scope to determine the tariff for a group of airports also, which will encourage development of smaller airports. Key Amendments in the Principal Act of 2008 and its comparison with proposed amendments of 2021 in tabular format is shown below. Section and Clause in Provisions in The Airports Provisions in proposed amendment The Airports Economic Regulatory Bill of 2021. Economic Regulatory Authority of India Act, 2008 Authority of India Act, (27 of 2008) 2008 (27 of 2008)

2 https://www.civilaviation.gov.in/sites/default/files/MoCA_Annual_Report_2018_19.pdf 7

Reference Division, LARRDIS, 2021

Section 2, “any other airport” “or a group of airports” shall be Clause(i) inserted after the words “any other airport”

Benefits of the proposed Amendment Bill

The Amendment is expected to extend its scope to determine the tariff for a group of airports also, which will encourage development of smaller airports.

Views and Comments of Media and Press related to the proposed amendments

 Bundled for privatisation: 7 airports making losses https://indianexpress.com/article/business/aviation/airports-privatisation-aai- 7231673/

 Govt to club loss-making, profitable airports to woo companies https://www.theweek.in/news/biz-tech/2021/03/17/govt-to-club-loss-making- profitable-airports-to-woo- companies.html#:~:text=According%20to%20the%20approved%20list,%2C%20Jal gaon%20and%20Kangda%2C%20respectively.

 Profitable, loss making airports may be clubbed together and offered https://indianexpress.com/article/business/aviation/profitable-loss-making-airports- may-be-clubbed-together-and-offered- 7175031/#:~:text=The%20government%20is%20expected%20to,being%20brought %20to%20the%20table.  Govt to privatise around 10 airports from April '21; plans to club unviable airports https://www.timesnownews.com/business-economy/industry/article/govt-to- privatise-around-10-airports-from-april-21-plans-to-club-unviable-airports/716070

Reference Division, LARRDIS, 2021