The BIAL consortium, promoters of the new Bengaluru International Airport (BIA), have a strong plan to make their airport a major aviation hub, for domestic and international airlines.

Its strongest competition is coming from the GMR promoted Rajiv Gandhi International Airport (RGIA) in Hyderabad.

Unfortunately for BIAL, successive governments in Karnataka are addicted to oil, or at least the revenues their high sales tax rates bring in. Karnataka has one of the highest rates of tax on petroleum products in India, and Aviation Turbine Fuel (ATF) is no exception.

While Andhra Pradesh and Kerala (home to Cochin International Airport), have sales tax rates on ATF at the 'declared goods' rate of 4%, Karnataka continues to levy a budget busting 28% sales tax on ATF. This dent in the wallets of airlines, makes Bangalore a less attractive destination.

Coupled with the higher costs of operating from BIAL, airlines are thinking hard on expanding operations at Bangalore, and that lessens our choices and weakens our economy as a whole.

May be the next finance minister of Karnataka will take a cue from a former finance minister, who proved that reducing income tax rates raised consumption and compliance, and kept the actual tax collected the same.

Dr. Manmohan Singh, please talk some sense in to the administrators of Karnataka, and while you are at it, may be the 4% can be applied to all petroleum products.

Ultimately, if we Bangaloreans, spend less on fuel and transport, we will spend on more productive goods and services that will ripple-benefit Karnataka's economy.

On May 5, 2008, the Indian Government finally approved the Airport Economic Regulatory Authority (AERA) Bill, and passed it to the Parliament of India. This bill has been languishing since its introduction on September 5, 2007, by the Civil Aviation Minister Shri Praful Patel.

Till now, almost all airports in India were controlled and operated by the Airports Authority of India. The rates they charged were controlled by the government, and were artificially low. The newly introduced private airport operators in Cochin, Delhi, Mumbai, Hyderabad, and Bangalore, could not operate at these low rates. They began exercising their private monopoly powers and threatened to hit airlines, passengers, and industry with large raises in landing and parking fees, user development fees (UDF), and cargo handling fees.

As per the press release, the function of the AERA will be to:

• Determine tariff structure for aeronautical services taking into consideration.
• capital expenditure incurred and timely investment in improvement of airport facilities.
• service provided, its quality and other relevant factors
• cost of improving efficiency
• economic and viable operation of major airports
• concession offered by central government in any MoU; etc. provided that different tariff structures are determined for different airport
• Determine the amount of development fees in respect of major airports
• Determine amount of passenger service fee to be levied under the Aircraft Rules.
• Monitor the performance standards relating to quality, continuity and reliability of service as may be specified by Central Government or any authority authorized by it.
• Call for information as may be necessary to determine the tariff.
• Perform such other tariff related functions as may be entrusted to it by the Central Government or as may be necessary to carry out the provision of the Act.

The Authority will also have penal powers. It will have the power to:

• Penalize for willful failure to comply with its orders and directions of the AERA Act.
• Punish for non-compliance of the orders of the Authority
• Penalize for offences by companies
• Penalize for offences by Government Departments.

The Authority shall determine tariff once in 5 years and may, if it considers appropriate in public interest amend, the tariff from time to time during the 5 years.

The AERA will have just 3 members, one Chairperson and 2 members, all appointed by the Central Government.

I can only hope that the Government pushes the bill through the Parliament, and sets up the AERA soon.

But, keep in mind, the AERA Bill is not meant for you and me, the individual passenger. Its is squarely aimed at the airlines and the airport operators.

For the last year, there has been a constant battle between the private airport operators and airlines. Earlier, DGCA, MoCA and Airports Authority of India (AAI) used to manage and regulate airports and aviation issues. With the AERA in place, private airlines can breathe a sigh of relief and hope to get fair treatment, and protection, from the monopolies of the airport operators, both private and Governmental.

If you are expecting relief from the outrageously high UDF being proposed by all the private airport operators, don't hold your breath.

From TravelBizMonitor.com

By Krupa Vora| Mumbai

After the recent announcement of starting flights to Kozhikode by June 15, 2008, Qatar Airways is now eyeing Bangalore as their destination in India. The airline is currently evaluating the feasibility of the route (Doha-Bangalore) and will apply for passenger operations once the new Bangalore International Airport is operational. “While the User Development Fee (UDF) at the Bangalore International Airport will add to the cost of travelling, the airport will also offer better services and a hassle free journey for passengers. Our strategy is to position Doha as a transit hub. Almost 30 per cent of our passengers disembark at Doha, whereas the remaining 60 per cent take connections to destinations in US, Europe and Africa,” stated Naveen Chawla, Regional Manager, India, Qatar Airways.

The airline is also in the process of augmenting online sales through various promotions. It recently concluded a month long pilot project, whereby passengers booking through the website of the airline availed special fares, as well added double miles to their frequent flyer programme. The carrier will look at introducing the project after conducting a feasibility study. “Currently, the online sales are very low. We are observing the trends in e-commerce market and will develop the segment and promote the online sales more aggressively after a detailed study,” informed Chawla. Apart from this Qatar Holidays, the holiday division of the airline is evaluating the market size in the country and may look at setting up a representation at a later stage.