AERA-2019

AIRPORTS ECONOMIC REGULATORY AUTHORITY OF INDIA (AMENDMENT) BILL, 2019

 The Airports Economic Regulatory Authority of India Act,

2008 established the Airports Economic Regulatory Authority of India

(AERA).

 The Bill amends the Airports Economic Regulatory Authority of India

Act, 2008.

 Rajya Sabha recently passed the Airports Economic Regulatory

Authority of India (Amendment) Bill, 2019.

Functions:

 AERA regulates tariffs and other charges for aeronautical services

provided at civilian airports with annual traffic above 15 lakh

passengers. It also monitors the performance standard of services

across these airports.

Why was AERA created, and what
is its role?
 To ensure that private airport operators do not misuse

their monopoly, the need for an independent tariff

regulator in the airport sector was felt. Consequently, the

Airports Economic Regulatory Authority of India Act, 2008

(AERA Act) was passed which set up AERA.

What changes are being proposed
in the Bill?

 Definition of major airports.

 Tariff determination by AERA.

Definition of major airports:

 Currently, the AERA Act defines a major airport as one

with annual passenger traffic over 15 lakh, or any other

airports as notified by the central government. The Bill

increases the threshold of annual passenger traffic for

major airports to over 35 lakh.

Tariff determination by AERA:
Under the Act, AERA is responsible for determining the:

 tariff for aeronautical services every five years

 development fees

 passengers service fee.

AERA will not determine:

 Tariff

 tariff structures

 development fees
Why is the Act getting amended?

 The exponential growth of the sector has put tremendous pressure

on AERA, while its resources are limited. Therefore, if too many

airports come under the purview of AERA, it will not be able to

perform its functions efficiently.

How would the Bill affect the regulatory
regime?
 Currently, there are 32 major airports (annual traffic above 15 lakh), and AERA

regulates tariffs at 27 of these. As per the Bill, AERA will regulate 16 major airports

(annual traffic above 35 lakh).

 The remaining 16 airports will be regulated by AAI. Till 2030-31, air traffic in the

country is expected to grow at an average annual rate of 10-11%.

 CONCLUSION

 This implies that in a few years, the traffic at the other 16 airports will increase to

over 35 lakh and they will again fall under the purview of AERA. This may lead to

constant changes in the regulatory regime at these airports.