AERA rejects GVK proposal to hike UDF at Bengaluru airport

The Airports Economic Regulatory Authority (AERA) has turned down Bengaluru International Airport Limited's (BIAL) proposal to increase user development fee (UDF) by 239 percent for domestic and 79 percent for international departing passengers from the airport.

The regulator, while issuing a consultation paper last week, seeking stakeholders' views on the issue, also said the proposal made by BIAL, a subsidiary of city-based infrastructure major GVK Group, to levy landing charges on all aircraft was not permissible as per the government orders.

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Instead, the regulator called for consolations suggesting UDF to be at Rs 262.32 and Rs 1,049.27 for domestic and international passengers, respectively under the single-till model. However when contacted, a GVK spokesperson said it would be premature for the company to have a response immediately as the discussions on the subject continued to be held.

The AERA also sought views on UDF under dual till model which is at 399.28 and Rs 1,597.14 for domestic and international passengers, respectively for the year 2013-14 with effect from October 1, 2013.

BIAL has originally proposed the domestic UDF under single-till to be Rs 783.09 (3.4 times higher of the existing rates) and the international UDF to be Rs 1,700 (1.8 times higher than the existing rates with effect from May 1, 2013. In the dual-till model it proposed Rs 1,729 for domestic and Rs 1,700 for international passengers.

BIAL is currently charging Rs 231.40 and Rs 952.30 for domestic and international departing passengers, respectively. The BIAL also proposed revised different tariff structures for the 2014-15 and 2015-16.

AERA while noting that the BIAL's annual tariff proposals are based on the effective date of implementation on May 1, 2013, said it is not possible to adhere to this date and therefore, has also calculated the UDF based on the effective date tentatively being October 1, 2013 saying it needs time to seek stakeholders opinion and analyse.

On the BIAL's proposal to levy parking fee on all kinds of aircrafts AERA said, "The Authority also notes that BIAL has proposed a minimum charge of Rs 5,000 for landing of all Aircrafts. The Authority notes that there is a circular of MoCA that no charges may be levied for aircrafts below 80 seats."

"Hence the Authority proposes not to consider a charge for ATRs. If there is a change in MoCA's instruction in this regard, the Authority is open to considering a charge for ATRs," AERA observed.

GVK Group holds 43 percent stake, Siemens Project Ventures GmbH 26 percent and Flughafen Zurich AG Ltd 5 percent, while state-owned entities Airport Authority of India and Karnataka State Industrial Investment & Development Corporation Ltd hold 13 percent each.

The airport handled 9.49 million domestic and 2.5 million international passengers during 2012-13, according to the figures given to AERA by BIAL.