Industry Odisha Bureau, Jul 13: The Airports Economic Regulatory Authority of India (AERA) has reportedly proposed that the User Development Fees (UDF) meant for the development projects at the Indian airports should be levied on the flight passengers/flyers only after the said projects are ready and commissioned instead of being charged during the beginning of the tariff cycle.
As per media reports, “The UDF is a passenger fee levied at Indian airports for both for domestic and international departures with the primary purpose to fund airport infrastructure projects in India so that the airports can modernize and expand to meet growing demands. Rates vary by airport and type of travel. Unlike the general service fees, UDF is regulated by AERA to maintain transparency and fairness in fee structures.”
Citing instance in this context, media reports stated, “Mumbai International Airport plans to invest Rs 10,000 crore in Terminal 1 redevelopment, increasing capacity by 42% and implementing advanced baggage and security systems, funded in part by the UDF.”
Thus, the UDF is reportedly strictly used for: “terminal redevelopment and capacity expansion, airside infrastructure improvements (runways, taxiways), security and baggage handling upgrades, and sustainability initiatives, including energy efficiency and net-zero emission goals”.
Media reports added that, “AERA sets UDF and other aeronautical tariffs under the AERA Act, 2008, and Tariff Guidelines, 2011, while the fees are structured to recover operational costs, ensure reasonable returns on capital investments, fund modernization and expansion projects without generating surplus for private operators. Besides, tariffs are typically set for a five-year control period balancing airport sustainability with passenger interests.”
Reportedly, “Greenfield airports like Hyderabad and Bengaluru also charge UDF to cover viability gaps, while Delhi and Mumbai airports use it to fund modernization projects. UDF is levied at most major Indian airports, including Adani-operated airports, such as Ahmedabad, Lucknow, Mangaluru, Jaipur, Thiruvananthapuram, Guwahati, and Mumbai (MIAL) as well as other major airports, such as Delhi (DIAL) Srinagar, Kolkata, Kochi, Kozhikode, Goa, Chennai, Patna and Bhubaneswar.”
