NEW DELHI: The Airports Economic Regulatory Authority of India (AERA) has sharply reduced the user development fee (UDF) at Bengaluru international airport, fixing it at Rs 300 for departing domestic passengers and Rs 997 for departing international passengers for the five-year control period ending March 2031, news agency PTI reported.As per the PTI report, the revised UDF will come into effect from September 1, 2026, while the fourth control period runs from April 1, 2026, to March 31, 2031.The domestic UDF is significantly lower than the existing Rs 550 and the Rs 450 proposed by airport operator Bangalore International Airport Ltd (BIAL). For international passengers, the revised fee of Rs 997 is below both the existing Rs 1,500 and the Rs 1,215 proposed by BIAL, AERA said in a release on Friday.The regulator has also rationalised landing charges, fixing them at Rs 442 per MT (Metric Tonne) for domestic flights and Rs 652 per MT for international flights during the control period.Domestic travellers make up around 84% of the total passenger traffic at Bengaluru airport.For the first time, AERA has adopted an incremental ARR (Average Revenue Requirement) framework for the airport. Under this approach, the cost of major capital expenditure projects will be recovered from passengers only after the projects have been completed, commissioned and put into use.Previously, UDF was recovered from passengers before the completion of such projects.“The approach is intended to ensure that tariff recovery is more closely aligned with the actual availability and use of the said capex projects of the airport and thus protect the airport users from premature tariff for assets that are not yet operational,” AERA said.“This is also aimed at encouraging the airport operator for timely execution and commissioning of big capex projects at the airport and thus reduce the risk of over-recovery for passengers and airlines in case of delays, deferment, non-execution of such planned capex projects,” it added.Under the new framework, the cost of identified high-value projects will not be included in the airport’s tariff from the first year of the five-year control period. Instead, an incremental tariff will be levied from the date on which the respective assets are completed, commissioned and made available for use.BIAL had proposed a baseline ARR of Rs 41,398.93 crore, equivalent to Rs 35,252.08 crore in present value terms, for the fourth control period. AERA, however, considered a baseline ARR of Rs 14,604.31 crore, or Rs 11,751.55 crore in present value terms.“This translates into a baseline Yield per Passenger (YPP) of Rs 390.42 per passenger, which has been suitably apportioned between landing and parking charges, UDF and other airport charges,” the regulator said.AERA has applied the incremental ARR mechanism to major projects including the ECT, T2 Phase 2 Terminal and T2 Phase 2 Apron. The regulator said these projects would be brought into the tariff framework only in the fourth year of the control period, 2029-30.“Accordingly, incremental tariff recovery will commence only after the respective assets are completed, commissioned and put to use, thereby aligning tariff recovery with the actual availability of infrastructure to users,” AERA said.“Thus, the UDF for BIAL for the 4th control period (2026-31) has been kept at a nominal Rs 300 per departing domestic passenger. Domestic passengers account for around 84 per cent of the total passenger traffic at Bengaluru airport. This will make air travel affordable to domestic passengers, while supporting the growth of domestic aviation,” it added.For disembarking passengers, the UDF will be Rs 125 for domestic travellers and Rs 426 for international travellers at the airport operated by BIAL.(With agency inputs)
