AERA abolished User Development Fee at Hyderabad Airport

The Airports Economic Regulatory Authority (AERA) abolished the user development fee at the Hyderabad airport on 25 February 2014.

Feb 26, 2014 12:10 IST
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The Airports Economic Regulatory Authority (AERA) abolished the user development fee at the Hyderabad airport on 25 February 2014.

AERA concluded the decision after considering various aspects of the airport’s operations, including the investments made by the airport operator, land allocation, traffic trends and earnings.

imageAs a result, the cost of flying at Rajiv Gandhi International Airport at Hyderabad will be cheaper from 1 April 2014 till 31 March 2016 for both domestic and international embarking passengers. As of now, domestic passengers pay 430 rupees as UDF with their ticket, while international passengers flying from the city pay 1700 rupees.

Hyderabad will now be the first airport in the country where UDF is being abolished. All major airports including Delhi, Mumbai, Kolkata, Chennai and Bangalore, among others, charge this fee.

While both domestic and international passengers will now have to pay less for flying from the airport, the development delivers a blow to the airport operator GMR Hyderabad International Airport Ltd, part of the GMR Group.

GMR Hyderabad International Airport is a joint venture company promoted by the GMR Group that holds 63 per cent share. The other share holders are the Union government at 13 per cent, Andhra Pradesh government at 13 per cent and Malaysia Airports Holdings with a stake of 11 per cent.

The Hyderabad airport, commissioned in March 2008, handled 6.3 million domestic passengers and 2.1 million international passengers in 2012-13.

During the first half of the current fiscal it handled 3.2 million and 1.2 million domestic and international passengers, respectively. It has a designed capacity to handle 12 million passengers.

image User development fee is a charge levied by airports on passengers to help the operator recover part of the investments made for the development of the airport and other facilities.

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