Flying Out of Bengaluru to Get Cheaper

Passenger air tickets for those flying from Bengaluru may soon get cheaper as the airport regulator has suggested reducing the user development fee (UDF) by 400 percent.

The Airports Economic Regulatory Authority (AERA) has proposed a cut in the existing UDF at the Kempegowda International Airport. It is being suggested to be reduced from Rs 306 per head to Rs 80 for domestic passengers and from Rs 1,226 to Rs 317 per head for international passengers. The revised rates would be just one-fourth of the old UDF charges.

If approved the proposed rates should be applicable from 1 July 2018 till 31 March 2019 as per the consultation paper by AERA. The Bengaluru Airport is managed by the Indian arm of Toronto-based Fairfax Holdings and served 26 million passengers in the financial year 2017-18.

The Bengaluru International Airport was allowed to collect charges on a 40 percent shared-till revenue mechanism in the first control period (2011-16) for expansion work. The same was considered in determining airport charges instead of the all non-aeronautical income under the single-till model. The charges will, therefore, be adjusted in the remaining tariff years. Domestic and International passenger UDF will see an 11 to 18 percent rise in the financial year 2020 when compounded annually.