AERA to scrap user development fee at Hyderabad airport from 1 April

The Airports Economic Regulatory Authority's (AERA) has decided to scrap user development fee (UDF) that airport operator GMR Hyderabad International Airport Ltd (GHIAL) charges domestic and international passengers at RGIA for a period from 1 April 2014 to 31 March 2016.

Beginning 1 April 2014, the cost of flying from the Rajiv Gandhi International Airport at Hyderabad will be lower by Rs484 per passenger at least for the next two years thanks to AERA.

Currently, domestic passengers departing from Hyderabad airport pay UDF of Rs430, which adds up to Rs484, including taxes while international passengers are charged Rs1,700, which along with taxes adds up to Rs1,910.

The AERA has determined UDF as zero with effect from 1 April to 31 March 2016, for both domestic and international embarking passengers.

"The authority (AERA) has decided that the facilitation component of the passenger service fee (PSF) would now be merged with UDF. However, in case of GHIAL, the authority has determined UDF as zero with effect from April 1, 2014, till March 31, 2016, for both domestic and international embarking passengers," AERA said in its order issued on Monday.

The AERA order also states that PSF will now comprise only the security component of Rs130 per passenger with effect from 1 April 2014, and that there will be no facilitation component in the PSF tariff structure. Currently, GHIAL charges a PSF of Rs200 per passenger, including the facilitation component.

However, AERA has decided to keep the common infrastructure charges, fuel supply charges and landing and parking charges at the RGIA unchanged.

The order further stated that as there will be no UDF, there would also correspondingly be no collection charge of Rs5 per passenger with effect from 1 April 2014.

UDF is a charge levied by airports on passengers as part of their revenue stream.

Hyderabad airport is operated by GMR Hyderabad International Airport, part of the GMR Group.

The AERA decision to scrap UDF comes at a time when the operator was planning to lap UDF on embarking passengers as well.