Passengers flying out of Kempegowda International Airport (KIA) will have to dig a bit deeper into their pockets from July 1. The Airport Economic Regulatory Authority (AERA) on June 10 cleared a hike in user development fee (UDF), which works out to 47.4 per cent for domestic and 43 per cent for international travellers.

For outbound domestic travellers, the UDF (excluding tax) will go up from Rs. 232 to Rs. 342. For outbound international travellers, the UDF will increase from Rs. 953 to Rs. 1,368. However, the passenger service fee of Rs. 70, which is currently being collected separately, will be stopped.

The new rates will be in force till the end of this fiscal. A revised amount will kick in from April 2015 to March 2016 when the UDF for domestic and international passengers will come down to Rs. 306 and Rs. 1,226, respectively.

The AERA’s order comes after several rounds of consultations on a proposal by the airport operator, GVK-led Bangalore International Airport Ltd. (BIAL), which had sought revision in UDF to pay for the expansion of terminal one (T1), which is completed, and also fund the second phase of expansion (Phase Two), which is estimated to cost about Rs. 10,000 crore. This is the first revision of UDF at the greenfield KIA that commenced operations in May 2008.

BIAL had sought an increase in UDF by 238 per cent for domestic and 79 per cent for international travellers departing from KIA, which the airport regulator had shot down last year and held fresh consultations with stakeholders before announcing its decision on June 10.

The airport regulator, while deciding on the revision of aeronautical tariff and UDF, has also rejected BIAL’s proposal to have a hybrid till model in which only 30 per cent of the non-aeronautical revenues are to be considered to determine the tariff and UDF. Instead, the regulator has insisted on 40 per cent. The State government, which has a 13 per cent stake in BIAL, had recently approved the decision to seek a hike in UDF.

Differential tariff

Airlines operating at KIA can take advantage of differential tariff for landing. Lower tariffs have been set for airlines operating during non-peak hours. BIAL will offer reduced tariffs for airlines bringing in more passengers. “KIA is the first airport in the country to have such a variable tariff plan,” a BIAL source told The Hindu.

In 2013-2014, the airport handled 1.29 crore passengers and the number is expected to reach two crore over the next four years. At present, the airport handles 1.25 lakh air traffic movements annually.

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