A large hike in airport tariff, as is being sought by Delhi airport operator DIAL, could reduce the number of flights through the national capital and hit the low-cost airlines hard, a study by a prominent credit-rating agency said today.
"We expect the tariff increase to result in some reduction in the number of flights to and from Delhi over the next two to three years," the Standard & Poor's Ratings Services said in a report.
It said any "large increase in tariffs could moderate the strong traffic growth" through the Delhi airport over the same period, though in the long-term air traffic growth was bound to grow.
The report came in the wake of Delhi International Airport Limited seeking a 774 per cent hike in aeronautical tariff and the airlines criticising the move saying it would make these charges costlier than those levied at Singapore, Bangkok, Dubai and Hong Kong put together.
"The increase in tariffs could also negatively affect the margins of some airlines, particularly low-cost carriers in India that primarily operate on domestic routes," the S&P report on the Delhi Airport Project said.
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