Airports Economic Regulatory Authority of India (AERA) Amendment Bill 2021

Context:

The Lok Sabha passed the Airports Economic Regulatory Authority of India (AERA) Amendment Bill, 2021 and seeks to amend the Airports Economic Regulatory Authority of India Act, 2008.

About Airports Economic Regulatory Authority of India (AERA) Amendment Bill 2021:

• The Lok Sabha on July 29, 2021, passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2021, which was tabled by Ministry of Civil Aviation
• The Bill will amend the Airports Economic Regulatory Authority (AERA) of India Act, 2008, by modifying the definition of ‘major airport’ under the AERA Act 2008.
• The Amendment will also enable privatization of smaller loss-making Airport Authority of India (AAI)-run airports by pairing them with larger profit-making airports. As earlier, the move to privatize only larger profit-making airports was met with criticism that this move would leave AAI with only loss-making airports.
• The Amendment will also enable tariff fixation of more than one airport. As of now, the Airports Economic Regulatory Authority (AERA) determines tariffs and other charges for aeronautical services of a single airport.
• This move is also likely to help in expanding the air connectivity to relatively remote areas and as a result, expediting the UDAN regional connectivity scheme.
• The amendment will allow AERA to regulate tariff and other charges for aeronautical services for not just major airport with annual passenger traffic of more than 3.5 million, but also a group of airports together,
• The bill proposes to amend the definition of “major airport” under Section 2(i) of the Airports Economic Regulatory Authority Act, 2008 to include ‘a group of airports’ in place of ‘any other airport’.
• The central government may also designate any airport as a major airport by a notification.

Need for reforms:

• Typically, airports run the risk of becoming a monopoly because cities usually have one civilian airport which controls all aeronautical services in that area.
• To ensure that private airport operators do not misuse their monopoly, the need for an independent tariff regulator in the airport sector was felt.

Airports Economic Regulatory Authority of India :

The Airports Economic Regulatory Authority of India Act, 2008 (AERA Act) was passed which set up the AERA.

• It is a statutory body.
• It was set up, keeping in mind that the country needs to have an independent regulator who has transparent rules and can take care of the interests of the service providers as well as that of the consumers.

Functions:

• The AERA regulates tariffs and other charges (development fee and passenger service fee) for aeronautical services (air traffic management, landing and parking of aircraft, ground handling services) at major airports.

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