The Airports Economic Regulatory Authority of India (AERA) has decided to slash the User Development Fee(UDF) for departing domestic and international passengers from the Kempegowda International Airport in Bangalore from September 16th, 2018 to March 31st, 2019.
An order issued by AERA on August 31st said that UDF collected from the international passenger for a ticket issued on or after September 16, 2018 will be Rs`558 per person. For domestic passengers, it will be Rs`139 per person.
The order also said that the UDF for international passengers for a ticket issued on or after April 1, 2019 will be `Rs 716 per person and for domestic, Rs 179.
Currently, a UDF of `Rs 1,537.08 is collected from international departure passengers and `Rs 384.27 from domestic departure passengers.
Aircraft parking, handling and housing charges for flights using the airport too have been slashed substantially, a move that will provide a huge benefit to all airlines suffering heavy losses.
This decision taken by AERA has been getting a mixed response. While some say the revised fee is “reasonable”, others argue that it should be zero, considering that the airport is making profits.
It’s, however, not clear whether the benefits of the reduction in the UDF will reach the end-user as airfares are independent of the UDF. It is market dynamics and not the UDF size which determines final fares.
According to Bangalore International Airport Limited(BIAL) CEO, Mr Hari Marar, Everything in the airline industry is dependent on demand and supply. A ticket might cost `Rs 20,000 one day and Rs `5,000 on another day. So, this aspect of UDF will not translate into an instant reduction in air fare