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Airfares set to rise a tad with hike in passenger service fee

The decision to raise PSF, unchanged since 2001, was taken after the Prime Minister’s Office (PMO) asked the finance ministry to look into the matter

, ET Bureau|
Updated: Dec 26, 2018, 07.10 PM IST
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NEW DELHI: Flying is about to get more expensive in India as the government has decided to raise the Passenger Service Fee (PSF) to Rs 170 from Rs 135 to meet the rising cost of airport security, which is provided by the Central Industrial Security Force (CISF).

“This increase will be enough to meet the cost of securing airports across the country for another three years and also clear the dues,” said an aviation ministry official, who did not want to be identified. “There will also be a system in place, which will ensure that PSF is increased every three years to meet the cost of securing airports.”

Delhi airport owes about Rs 800 crore to CISF, prompting a threat to curtail its services in August.

The decision to raise PSF, unchanged since 2001, was taken after the Prime Minister’s Office (PMO) asked the finance ministry to look into the matter. The home secretary had written to the aviation ministry about withdrawing the CISF from Delhi airport unless dues were paid.

“The mandate to raise PSF to meet the cost has gone to the finance ministry now,” the official said. “It has been asked to raise PSF at regular intervals to ensure that costs are met.”

Officials said it costs more than Rs 1,300 crore annually to provide security at airports across the country. Total PSF collections fall short by about Rs 500 crore. State-owned Airports Authority of India (AAI) accounts for about Rs 150 crore of this gap and pays the amount from its own funds, it says.

Private airports, however, do not pay from their own corpus.

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