The proposed Airport Economic Regulatory Authority will have powers to determine capital expenditure and investments to improve airport facilities, check monopolies, set tariffs for aeronautical services, as well as prescribe standards for operations across airports.
The airport regulator, that will prescribe tariffs every five years, will also keep a check on the economic and operational viability of airports.
Airport operators will have to get the prior approval of the regulator before charging a specific development fee at an airport. Besides, it will also prescribe the passenger user charges for the use of airport.
The AERA, which will have a chairman and two members, will also have powers to undertake enquiries into the functioning of a particular airport operator and seek specific information on its operation.
AERA, which will be different from Directorate General of Civil Aviation, has been proposed as the government feels the sector required a regulator as it is embarking on greater privatisation in the airport infrastructure sector.
The regulator will only deal with the operations of the airports as the government is of the view that issues relating to airlines and anti-competitive practices in air transport services can be handled by the Competition Commission of India.
The civil aviation ministry was looking at two options for setting up the aviation regulator. First, it could bring in a separate bill, or else it could introduce provisions in the proposed civil aviation policy.
As per the proposal of the civil aviation ministry, the regulator will have all pricing regulation powers, while rule making will rest with the civil aviation ministry.
The original idea of setting up an airport economic regulator was given by the Naresh Chandra Committee, set up to prepare a roadmap for the country's civil aviation sector as it felt that the current liberalisation in the airport infrastructure sector could lead to natural monopolies.
