BENGALURU: Refusing to give permission for any immediate big hike in User Development Fee (UDF) sought by the operator of Kempegowda International Airport (KIA), tariff regulator Airports Economic Regulatory Authority of India (AERA) has ordered that status quo be maintained until March next year. From April 1, 2022, it has permitted a steep hike in fee at the airport.
The present fee of Rs 184 for departing domestic passengers and Rs 839 for departing international passengers will continue even after October 1, 2021, when the Third Control Period (2021-2026) for Bengaluru airport begins.
From the the next financial year, Rs 350 will be for domestic passengers and Rs 1,200 for international passengers, and stay in effect till end of March 2023. It will subsequently increase in a graded manner through the Control period.
In the first week of July, AERA had proposed hiking user fee from October 1, and put up its proposal on the website, inviting comments. It now appears that the proposal met with stiff opposition from its stakeholders, forcing it to delay the hike.
It had proposed revision of UDF to Rs 450 from Oct 2021 to March 2023, Rs 550 from April 2023 to March 2024 and Rs 555 from April 2024 to March 2026 for domestic passengers. It has also proposed a hike of Rs 1,350, Rs 1,650 and Rs 2,220 during the respective phases for international passengers.
Airport operator Bangalore International Airport Limited (BIAL) has expressed disappointment over AERA’s tariff decisions. A BIAL spokesperson told The New Indian Express, “For 11 years, BIAL has reinvested its earnings to fund this capacity enhancement, hoping to provide strong earnings to shareholders once the project is completed.
It is, therefore, very disappointing to receive a tariff order which is likely to be seriously inadequate to meet our cash flow requirements and will also pose a challenge when it comes to meeting operational expenses.” This is further exacerbated by the fact that during the period of recovery of this investment, traffic is at its lowest as a result of the ongoing pandemic.