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Domestic airfares may increase on revision of passenger services fee

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Domestic airfares may increase on revision of passenger services fee

NEW DELHI: Domestic flights are likely to get pricier owing to an increase in passenger services fee (PSF), a component that has not been revised since 2002.

Each passenger pays Rs 130 as PSF and the fund accumulated from the levy is used primarily to pay salaries of the Central Industrial Security Force (CISF) personnel manning the airports.

"An increase was necessitated after money collected by the Airports Authority of India (AAI) and private operators of DELHI and Mumbai through PSF was not sufficient to meet the cost of security at their airports," said a government official, who did not want to be identified.

The increase in PSF is likely to be nominal, the official said. It costs more thanRs 1,300 crore to provide security at airports across the country while the fund collected through PSF falls short by more thanRs 400 crore, officials said.

Of this shortfall, the state-owned AAI has a deficit of Rs 150 crore a year that it pays from its own corpus. The rest is borne by the private operators of airports.

Mumbai airport used to be profitable till the Terminal 2 was opened in January 2014, after which its expense on security increased, the official cited earlier said.

Emails and messages sent to spokespersons of Delhi and Mumbai airports did not elicit any response till late evening on Tuesday. Kochi, Hyderabad and Bengaluru airports, on the other hand, earn more through PSF than they are able to spend, the official said.

The PSF collected from passengers departing from private airports goes into the account of the private operator concerned and collections from passengers using AAI airports go into for the government-owned airport's account.

The shortfall and surplus in the PSF is maintained airportwise and any shortfall is bridged by the respective airport operator. Likewise, any surplus also goes to the respective airport operator, who can only spend it on security

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