Ahmedabad Airport UDF Hikes: 400% for Domestic, 935% for Int’l in 3 Yrs

Ahmedabad : In the last three years, the User Development Fee (UDF) at Ahmedabad Airport has risen by over 400% for domestic passengers and over 935% for international passengers. These details were provided by the Ministry of Civil Aviation in response to a question in the Rajya Sabha regarding the types of taxes levied per passenger at Ahmedabad airport over the last five years.

According to the reply by Minister of State in the Ministry of Civil Aviation Murlidhar Mohol “Government of India has established an independent economic regulator i.e Airports Economic Regulatory Authority of India (AERA) for determination of Tariff for aeronautical services rendered at Major Airports in the country including Ahmedabad Airport. As per the tariff determination process, AERA allows the Airport Operator to recover its entitled revenue in the form of landing and parking charges from Airlines and User Development Fee (UDF) from passengers. Details of per passenger UDF levied on embarking passengers at Ahmedabad Airport along with the increase during the last five years are at Annexure.”

Meanwhile, in another reply to a question regarding the impact of the User Development Fee hike, the MoS stated “Government of India has established an Independent Economic Tariff Regulator i.e. AERA in 2009, under the AERA Act, 2008 to determine tariff for aeronautics service provided at major airports. AERA determines aeronautical charges such as landing, parking and UDF of all the major airports, inter-alia considering the following factors :

The Regulator aims to balance optimally the interest of service provider and the end user and ensures that the airport operator maintains and operates the airport with reasonable return on investment consisting with risk profile. As each airport has different capital expenditure profile, return on capital employed, operational expenditure, traffic inflows, under/ over- recovery in previous control period as well as revenue collection from cargo operators, Ground Handlers and  Fuellers, AERA maintains balanced approach for ensuring reasonable tariff keeping interest of all stakeholders in mind and translates these factors to different entitled revenue requirements apportioning them reasonably to Landing, Parking and User Development Fee (UDF)  charges for different airports.”

The reply further states, “Since Government does not fund Airport Development, UDF enables the airport operator to fund his expenses for providing airport services. Thus, UDF ensures seamless operations for the passenger convenience by creating/upgrading the passenger amenities and services, particularly in the terminal building. The amenities provided by the Airport Operator are majorly used by the passengers and thus levying UDF is an appropriate way of ensuring contribution directly from the passenger/user utilising the services. The Passenger Service Fees/UDF is an acceptable principle and levied at most of the airports globally on the users availing the benefit of the services at the airport.”

As per the audited annual accounts of some of the major airlines of India and IATA’s World Air Transport Statistics, the major components of the total airfare generally are aircraft fuel, rental and flight equipment, general and administrative expenses, repair and maintenance, crew salary, etc.

The Airport charges (a component of total airfare) viz., landing, parking and UDF are in the range of 8-10% of the total airfare, out of which portion of UDF is upto 4%.