“To meet market demands, infrastructure needs to be upgraded and for that the government is involving private players,” said a senior government official. With privatization, services may improve but it will also mean increased airport fees and user development fee (UDF).
Currently, the UDF for domestic and international terminal per passenger per flight at Ahmedabad is Rs 110 and Rs 410 respectively. According to rough estimates, with privatization the UDF will double.
Even the parking rates may go up. Privatization will involve such areas as the terminals, flight handling, and shops. Air Traffic Control will remain with the government.
“Implementing public-private partnership in airports is a good step,” said G Raghu0ram, a professor at IIM-A. “Government-run organizations have constraints. A private player will bring entrepreneurial thinking to the table. Airline industry has to cope with the current global market standards and a private player can do that.”
Privatization is likely to make food and beverages costlier. One can have a cup of tea at the Ahmedabad airport for Rs 30 but the same costs almost Rs 100 at Mumbai. With the new management, new concessionaries will come up and they too will charge passengers to cover up their investments and rents.
Not only passengers, airlines will also have to pay more as parking and operating charges at the airport. The airlines will pass the excess charges on to the passengers.
After the privatization of the Mumbai airport, many top corporate figures started parking their private jets at the Ahmedabad airport because of lower parking fee here. Now, the corporate jets will either have to pay more or look for cheaper options.