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Air tickets to be now cheaper as AERA decides to cut user development fee

A final decision was awaited from AERA following a public consultation on June 15 in the city in connection with its proposed reduction.

Published: 31st July 2018 03:19 AM  |   Last Updated: 31st July 2018 03:19 AM   |  A+A-

Image used for representational purpose only.

Airplane.(Image used for representational purpose only)

Express News Service

BENGALURU: It is now official. Your airfare will be lighter on your pocket. Airports Economic Regulatory Authority of India (AERA) has decided to stick by its proposal to slash the user development fee (UDF) to be collected from departing passengers at Kempe Gowda International Airport. The new charges will come into effect from September 1 instead of August 1 as planned.

Speaking to The New Indian Express from New Delhi, AERA Chairman S Machendranathan said, “We have decided on a substantial reduction in the present UDF that is being collected from passengers. The exact charges will be made public within a week.”

A final decision was awaited from AERA following a public consultation on June 15 in the city in connection with its proposed reduction. “We have gone through the responses received during the public consultation and are now finalising the aeronautical tariff to be collected,” he said.

While BIAL and the state government had opposed any kind of reduction, most other respondents had backed AERA’s proposal.

Explaining the reasons for the massive tariff reduction it will be announcing, the chairman said that the revised UDF had to be announced over two years ago so that it could be effected during the five-year control period 2 from April 2016 to March 2021. However, it had not been done earlier.

‘Airport is unable to meet its operating expenses’

AS per the AERA Act passed by the Parliament in 2008, aeronautical tariffs for airports in India can be levied for a five-year period, known as Control Period. In the case of Bangalore International Airport Ltd, Control Period 1 was fixed from 2011 to 2016 (financial year),  Control Period 2 from 2016 to 2021 (fin year)  while Control Period 3 will be from 2021 to 2026 ( fin year).

“BIAL has already collected the existing tariff at the airport since 2016 though the control period 1 ended. We are taking this aspect into consideration when fixing the new tariff and so have decided on a major cut in UDF,” AERA Chairman S Machendranathan said.

AERA had on May 29 proposed a fee slash (up to March 21, 2019) of Rs 316.76 for international passengers from the Rs 1,226 being paid presently (see box). For departing domestic passengers, it had suggested Rs 79.19, down from Rs 306 paid now. This excludes tax.The initial deadline to implement the new UDF was planned for July 1, it was postponed to  August 1 and has now been finalised as September 1.

Explaining the rationale behind such a fee on passengers, Machendranathan said when an airport is unable to meet its operating expenses despite collecting aircraft landing charges, baggage handling charges and other fees, it is permitted to collect additional charges from passengers to mop up its revenue.The chairman added that the UDF could go higher in Control Period 3 as BIAL would have invested in upgrading its infrastructure by then.

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