Amendments to Act regulating major airports passed in LS

Source: Livemint

Introduced: Rajya Sabha (12th July 2019)

Passed: Rajya Sabha (16th July 2019)

Passed: Lok Sabha (2nd August 2019)

Present status: Received assent of the President on 6th August 2019

The Airports Economic Regulatory Authority of India (Amendment) Bill, 2021.

Purpose of the Bill:
  • The Bill seeks to amend the Airports Economic Regulatory Authority of India Act, 2008.
  • The 2008 Act established the Airport Economic Regulatory Authority (AERA).
    • AERA regulates tariffs and other charges (such as airport development fees) for aeronautical services rendered at major airports in India.
Key provisions of the Bill:
 1. Definition of Major Airports:
  1. The 2008 Act designates an airport as a major airport if it has an annual passenger traffic of at least 35 lakh.
  2. The central government may also designate any airport as a major airport by a notification.
  3. The Bill adds that the central government may group airports and notify the group as a major airport.

2. Tariff:

  1. The amendment will allow AERA to regulate tariff and other charges for aeronautical services for not just major airports with annual passenger traffic of more than 35 lakh, but also a group of airports

3. Clubbing of Airports:

  • The bill will allow the government to club profitable and non-profitable airports as a combination/package to bidders to make it a viable combination for investment under PPP (Public-Private Partnership) mode.
Benefits of the Amendment:
  • The Bill will pave the way for the privatization of a small, loss-making airport by clubbing it with a larger airport.
    • The government has already decided to privatize airports at Amritsar, Varanasi, Bhubaneshwar, Indore, Raipur, and Tiruchirapalli. But it is yet to finalize smaller airports that can be paired with them for disinvestment.
  • Moreover, the bill will also help in expanding the air connectivity to relatively remote areas and as a result, expediting the UDAN regional connectivity scheme.
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