Airport Economic Regulatory Authority Amendment Bill, 2021

In News 

Recently, the Lok Sabha has passed the Airport Economic Regulatory Authority (AERA) Amendment Bill, 2021.

About

  • The Bill was first introduced in March 2021, and was subsequently referred to a parliamentary panel, which approved it without any changes.
  • It seeks to amend the Airports Economic Regulatory Authority of India Act, 2008.

Key Provisions 

  • It will allow AERA to regulate tariff and other charges for aeronautical services for not just major airports with annual passenger traffic of more than 3.5 million, but also a group of airports together.
    • Currently, the airport sector regulator determines the tariff of a single airport and the amendment will allow for tariff fixation of more than one airport.
  • It proposes to modify the definition of a major airport to include a group of airports under the AERA Act 2008.
  • It aims to pair the smaller non-profitable airports with profitable airports as a combination/package to bidders to make it a viable combination for investment under PPP mode.

Image Courtesy: BS

Significance  

  • This move is also likely to help in expanding the air connectivity to relatively remote areas and as a result, expediting the UDAN scheme
  • It will pave the way for the privatisation of a small loss-making airport by clubbing it with a larger airport.

Concerns

  • Lack of clarity in the bill on the criterion for deciding which airports will be clubbed together to qualify under ‘a group of airports’ definition.

Airports Economic Regulatory Authority

  • With the advent of private players in the airport sector in 2006, there was a risk of monopoly by them. To counter this, the Airports Economic Regulatory Authority of India was established in 2008 under the AERA Act.
  • Before AERA came into existence, the Airports Authority of India, functioning under the civil aviation ministry, was in charge of monitoring services at airports.
  • Several committees had pointed out a conflict of interest since AAI is also a regulatory body.
  • Functions: To determine the tariffs and other charges( capital expenditure and passenger service fee) for the aeronautical services at major airports.

Source :LM