The Airports Economic Regulatory Authority of India (AERA) has sharply reduced the User Development Fee (UDF) at Bengaluru’s Kempegowda International Airport, reported PTI.
The regulator has fixed the UDF at Rs 300 for departing domestic passengers and Rs 997 for departing international passengers for the five-year control period ending March 2031.
The revised charges will come into effect from September 1, 2026. The domestic UDF is significantly lower than the existing Rs 550 and the Rs 450 proposed by Bangalore International Airport Ltd (BIAL), the airport operator. For international passengers, the new fee is down from the existing Rs 1,500 and below BIAL’s proposed Rs 1,215.
AERA has also introduced the incremental Average Revenue Requirement (ARR) framework for the airport for the first time. Under this approach, costs related to major capital expenditure projects will be recovered through tariffs only after the projects are completed, commissioned and made available to passengers.
AERA links major project costs to completion
“Similarly, UDF for departing international passengers has been fixed at Rs 997 per passenger, as against Rs 1,215 proposed by the airport operator and the existing UDF Rs 1,500.
“Further, the landing charges have also been rationalised and determined at Rs 442 per MT (Metric Tonne) for domestic flights and Rs 652 per MT for international flights for the control period,” it said in a release.
For passengers arriving at Bengaluru airport, the UDF has been set at Rs 125 for domestic travellers and Rs 426 for international travellers.
The fourth control period runs from April 1, 2026, to March 31, 2031. Domestic passengers make up around 84% of the airport’s total passenger traffic.
AERA said the incremental ARR mechanism is designed to prevent passengers and airlines from paying for airport infrastructure before it becomes operational. It also aims to encourage the timely completion of major projects and limit the possibility of over-recovery if planned projects are delayed or not executed.
T2 Phase 2 projects to attract incremental tariff later
Under the new framework, the cost of selected high-value projects will not be included in the airport’s tariff from the beginning of the control period. Instead, the additional tariff recovery will start once each project is completed, commissioned and put into use.
For Bengaluru airport, the identified projects include the Eastern Cargo Terminal (ECT), Phase 2 of Terminal 2 and the Phase 2 apron at T2. AERA has scheduled the incremental ARR for these projects to come into effect only in the fourth year of the control period, or 2029-30.
BIAL had proposed a baseline ARR of Rs 41,398.93 crore, equivalent to Rs 35,252.08 crore in present value terms, for the fourth control period. AERA, however, considered a baseline ARR of Rs 14,604.31 crore, or Rs 11,751.55 crore in present value terms.
“This translates into a baseline Yield per Passenger (YPP) of Rs 390.42 per passenger, which has been suitably apportioned between landing and parking charges, UDF and other airport charges,” the release said.
AERA said the lower UDF for domestic passengers would help keep air travel more affordable while supporting the expansion of domestic aviation.
“Thus, the UDF for BIAL for the 4th control period (2026-31) has been kept at a nominal Rs 300 per departing domestic passenger. Domestic passengers account for around 84 per cent of the total passenger traffic at Bengaluru airport. This will make air travel affordable to domestic passengers, while supporting the growth of domestic aviation,” the release said.