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AERA Amendment Bill, 2021

Topics Covered: Infrastructure- airways.

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.

 

Background:

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.

 

What are the new provisions?

  1. The 2008 Act designates an airport as a major airport if it has annual passenger traffic of at least 35 lakh. As per the Bill, the central government may also designate any airport as a major airport by a notification.
  2. It 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. Profitable Clubbing: The government will be able 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.

 

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.

 

Benefits of the new legislation:

  1. Helps in improving and expanding the air connectivity to relatively remote areas expediting the UDAN regional connectivity scheme.
  2. Encourages the development of smaller airports.

 

InstaLinks:

Prelims Link:

  1. Highlights of the Bill.
  2. Powers of the Central Government.
  3. About AERA.
  4. About AAI.

Mains Link:

Discuss the need for and significance of the Bill.

Sources: the Hindu.