Bangalore Airport Under Pressure To Withdraw User Development Fee!

With Bangalore International Airport Limited (BIAL) registering huge profits in the past three years, there is a growing demand for withdrawal of the User Development Fee (UDF).

UDF is the tax that is levied on an airplane passenger by the airport operator, to receive a fair share of return on the investment done for development of the airport.

The Bangalore Political Action Committee (B.PAC) wants BIAL to stop burdening passengers with the fee and fund their infrastructure projects from other sources.

According to the data collected by B.PAC, BAIL has collected a total sum of Rs 1212 Crore as UDF in the past 2 years. This amount is 30%  more than what BIAL had estimated, based on traffic projections in 2010. .

The annual reports of Bangalore Airport show that 40% of its revenue comes from UDF. In the year 2016-2017 BIAL generated Rs 1,314.35 crore from operations out of which, more than Rs 500 Crores was only from UDF.

Here’s a chart showing the UDF collection by the Bangalore Airport-

BIAL is pushing for the continuation of the existing UDF till 2021 to fund its future infrastructure projects. The airport is running at full capacity of 25 million passengers a year and BIAL is targeting to double it in the next four years.

Airport authorities are planning to build a runway, a new terminal building and supporting infrastructure in the near future. They estimate that this expansion will cost Rs 12000 crores. The Karnataka government has supported BIAL’s stand on continuing the current UDF charges.

Managing Trustee of B.PAC, Ms. Revathy Ashok, has said its unfair to burden the passengers with this fee since the airport recorded a profit of 50 % last year. She also said that this kind of profitability is unheard of in any industry and this establishes the fact that excessive UDF charges have contributed to BIAL’s higher profit margin.

According to a citizen activist Mr Sanjeev Dyamannavar, in the past 10 years, BIAL has not done anything to generate income from the airport land. He suggests that they should tap into non-aeronautical revenue instead of burdening the passengers.

UDF is revised every 5 years by the Airports Economic Regulatory Authority (AERA) and the Ministry of Civil Aviation. The fee was last revised at the Bangalore Airport in 2015. Currently, Bangalore Airport charges the highest UDF in India.