The Airports Economic Regulatory Authority of India Act was enacted on December 5, 2008 for the purpose of constituting Airports Economic Regulatory Authority to control the tax or charges inflicted at the airdrome in the aeronautical services. The Act also aims to scrutinize the functioning of the airports and to constitute Appellate authority to settle or decide upon the disputes. The application of the Act extends to all the airdromes that provide air transport facilities or desire to provide such service except the airdromes that are under the control of army, navy or air force or any paramilitary services of the Centre. The Act also affects the airports managed by private enterprises or airports that are leased, all civil enclave and all important airdromes.

The Act defines ‘airport’ as the place where landing and taking off of the aircrafts generally with landing field and also include aircraft repair and maintenance and facilities to the passengers. The term aircraft also has the same meaning of ‘airdrome’ as provided under the Aircrafts Act, 1934. The Central Government is authorized under the Act to constitute an Airports Economic Regulatory Authority for the purpose of accomplishing the powers and functions entrusted to it by the legislation. The Authority shall have the status of a body corporate having continuous succession, right to acquire and sell off properties and the right to take proceedings in the Court.

The Authority shall comprise of a Chairperson and two nominees of the Central Government and an additional member to be appointed representing the Ministry of defense where the matter is relating to the civil enclave in the military airdrome. The members shall have special knowledge and proficient skill in aviation, economics, legal affairs, trade and commerce etc. The Chief Executive of the regulatory authority shall be the Chairperson. The Selection Committee shall advice the Central government in appointing the Chairperson as well as other members of the Authority. The Selection Committee shall be established by the Central Government for the purpose of selecting members of the Authority.

The Chairperson is entrusted with the power to supervise and direct the performance of the affairs of the authority. He shall also chair the meetings and execute the powers and responsibilities of the Authority. Additionally, the authority shall accomplish the following functions in a major airport:

  • Determination of the tax or tariffs;
  • Settle on the amount chargeable as development fee;
  • Decide on the passenger service fee imposed by the Aircraft Act, 1934;
  • To observe the standards of performance concerning the quality, stability and consistency of the services are according to the terms and conditions prescribed by the Central Government;
  • Get hold of information for the purpose of fixing the tariff;
  • Other functions necessary to determine the tariff as assigned by the Central Government.

The Authority while performing functions shall give attention to the sovereignty and integrity of the nation, defense of the state, peaceful relations with other nations, decorum and ethics. To discharge the responsibilities more effectively, the Authority is empowered to issue directions to the service providers if required.

The Act further authorizes the Central government to constitute Airports Economic Regulatory Authority Appellate Tribunal to settle disputes as provided under the Act. An application for the settlement of dispute shall be lodged by the Central or State Government, local authority or any individual to the Appellate Tribunal. The Tribunal shall be guided by the natural justice principle and follow the procedures of the Civil Procedure Code, 1908. The order of the Tribunal shall be challenged before the Supreme Court by the aggrieved person. The Act also penalizes for the willful non-compliance with the orders of the Tribunal. The Central Government shall have power to frame rules for the proper implementation of the Act.

The present Act amended The Aircrafts Act, 1934 and The Airports Authority of India Act, 1994 by adding a schedule to the Act. Hence the Act established a new authority for the determination of tariff conditions and the proper conduct of the functions at the airports.