Bengaluru Airport User fee hike 120%

Bengaluru Airport User fee hike 120%

Bengaluru Airport – user fee hike is by 120% . Flying out from the Bengaluru airport will be costlier by a massive 120 percent from 16th April  following the airport tariff regulator (Aera)  allowing it to revise upwards the user development fee (UDF) for four month.

This order of AERA No. 18/2018-2019 follows the interim relief given by the Telecom Disputes Settlement and Appellate Tribunal’s (TDSAT) ruling of March 14, allowing BIAL to collect revised charges for a limited period of 4 months.

What is User Development Fee?  (UDF):

User Development Fee (UDF) is one of the many fee and tax paid by air passengers. One such fee is the User Development Fee (UDF). It is charged at various airports for both arriving and departing passengers.

Airport Economic Regulatory Authority (AERA ) :

The Airports Economic Regulatory Authority (AERA) is a statutory body constituted under the Airports Economic Regulatory Authority of India Act, 2008 (27 of 2008) notified vide Gazette Notification dated 5th December 2008. The AERA was established by the Government vide its notification no GSR 317 (E) dated 12.05.09 with its head office at Delhi.

Bengaluru airport :

It is also known as Kempegowda International Airport  is an international airport serving Bengaluru. Spread over 4,000 acres (1,600 ha), it is located about 40 kilometres (25 mi) north of the city near the village of Devanahalli.. It is owned and operated by Bengaluru International Airport Limited (BIAL), a public-private consortium.

The airport opened in May 2008 as an alternative to increased congestion at HAL Airport, the original primary commercial airport serving the city. It is named after Kempe Gowda I,  the founder of Bengaluru. Kempegowda International Airport became Karnataka’s first fully solar powered airport developed by CleanMax Solar.

PPP Model -Bengaluru Airport :

The Government of India has granted BIAL the right to operate the airport for 30 years, with the option to continue for another 30 years. The company is a Public-private consortium venture.  26% is held by government entities Karnataka State Industrial Investment and Development corporation (13%)and Airports Authority of India (13%), and 74% is held by private companies Fairfax Financial (48%) and Siemens Project Ventures (26%).

120% hike – Bengaluru Airport :

The nation’s third busiest airport after New Delhi and Mumbai, plans to use the additional fee to fund its expansion.

With the Aera order coming into effect from April 16, the UDF for domestic departures will be revised to Rs.306 from Rs.139 while for international departures it will be Rs.1,226 from Rs.558 earlier.

The new charges for domestic and international travel translate into an increase of 120% and 119%  respectively.  The revised fee is applicable for tickets procured between April 16 and August 15,  the increased fee will be rolled back from August 16.

User  fee hike to be utilized for the expansion of Bengaluru airport :

The Rs.13,000 crore second phase expansion of Bengaluru Airport entails construction of a new terminal, a second runway, access roads and a multi modal transport hub.  These works are scheduled to be completed by March 2021.

According to Hari Maras, the Managing director and Chief executive, “this incremental increase in charge will provide us with the much needed relief as we are in the midst of a Rs.13,000 crore capacity expansion”.

As mandated by Aera (Airports Economic Regulatory Authority), the money generated from the incremental UDF hike during these four months, will be deposited in a separate bank account and will be used only to fund the ongoing expansion.

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