Updated: September 10, 2021 7:18:46 am
From April 2022, passengers flying out of Bengaluru will have to pay more for flight tickets since the Airports Economic Regulatory Authority (AERA) has allowed the Bangalore International Airport Ltd (BIAL) to increase the user development fee (UDF) for four years till March 2026.
However, AERA has refused to give permission for any immediate hike in the UDF as sought by BIAL.
AERA, in an order last week, stated that from the next financial year, a fee of Rs 350 for departing domestic passengers and Rs 1,200 for international passengers will be in effect till the end of March 2023, and subsequently increased in a graded manner through the third control period, according to order. The present fee for departing domestic passengers is Rs 184 and Rs 839 for international travellers.
BIAL had sought the rise citing expansion of projects amounting to Rs 13,000 crore and also significant fall in air travel demand and the economic slowdown due to Covid-19 induced lockdowns.
Speaking to indianexpress.com, a BIAL spokesperson said, “The tariff revision has come at a time when Bengaluru Airport is about to complete and operationalise a massive Rs 13,300 crore expansion programme, focused on investing in critical capacity to cater to demand, including the construction of a new runway, Terminal 2, and associated projects.”
The spokesperson added, “For the last 11 years, BIAL has reinvested its earnings to fund this capacity enhancement, hoping to provide strong earnings to the shareholders once this project is completed.”
Expressing disappointment over the order, the spokesperson said, “It is 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 the recovery of this investment, traffic is at its lowest as a result of the ongoing pandemic.”
According to BIAL, the airport authorities have tried to strike a balance between their financial position and industry and passenger concerns by proposing to the authority to keep the tariffs lower during FY 2021-22 and FY 2022-23, giving time to the market time.
“Crucially, AERA has postponed recovery of Rs 1,100 crore of the Aggregate Revenue Requirement to the Fourth Control Period, beginning April 2026. As a result, this is likely to delay the shareholder returns during the control period, causing nervousness and adversely impacting investor sentiments towards the aviation sector that is seriously impacted by the pandemic,” the spokesperson informed.
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