The bitter pill called User Development Fee

Bangalore: The satisfaction of Bengaluru International Airport (BIA) completing six months of operations did not stop BIAL CEO Albert Brunner from being bitter about the Ministry of Civil Aviation’s indecision over the issue of user development fee (UDF).
BIA had proposed to charge a UDF of Rs 675 from every departing domestic passenger from the time of commencement of operations.
The Ministry had asked BIA not to collect UDF from domestic passengers before three months of completion of operations. Now, after six months of operations at BIA, BIAL still awaits a decision on UDF. BIA has been charging Rs 1075 as UDF from each international passenger. GMR-constructed airport at Hyderabad, which started operations in March, started collecting UDF of Rs 375 from domestic passengers in August.
‘’We have been losing Rs 22 crore a month, mainly on account of UDF. We had expected to break even in five years, but without collection of UDF, it would take still longer,” Brunner said. Air traffic has also been far below the projections.
On some airlines not paying airport charges to BIA on time, Brunner said: “The scenario is the same at all across India. With the aviation industry taking a beating, airlines are struggling to survive.
We are in talks with airlines for payment of various charges for using airport facilities and have also taken some serious measures in certain cases.” For long-term revenue generation, BIAL has plans of taking up real estate and other commercial activities in a big way.
13/11/08 Expressbuzz

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Categories: Airports Nov 2008