Owing to the limited capacity of international flight operations in the air bubble corridor, international air tickets are currently costing more than usual and burning holes into the pockets of travelers. On top of that is the collective cost of taking an RT-PCR test before and after arrival in India. The resumption of regular international passenger flights would have normalized airfares for travel to and from India if the emergence of Omicron had not called off the normalization of international travel. Apparently, any chance for airfares to be normal again is at the mercy of the #Omicronvariant.
“Starting in 2022, flying out of India will be costlier as per reports by the aviation regulatory authorities. Several major Indian airports have hiked the User Development Fee (UDF) that will be implemented in a phased manner through 2025 and levied on outbound travelers, both domestic and international. The increased UDF is one of the few measures that the airports have taken to meet the drastic revenue shortfall amid the pandemic,” said the chief travel information officer of Indian Eagle.
What is User Development Fee (UDF)?
User Development Fee is one of the various charges clubbed with basic airfares paid by travelers. It varies from airport to airport based on multiple factors. It is a sort of revenue-generating instrument for airport operators in India. It gets airport operators a pie of return on investment in case of revenue shortfall. The varying rates of UDF are determined by the Airports Economic Regulatory Authority of India (AERA) for major Indian airports.
Kempegowda International Airport is not immune to the tremors of a huge financial setback that the pandemic has caused to India’s aviation economy. Recently, the Airports Economic Regulatory Authority (AERA) approved the BLR Airport authority’s proposal for a hike of UDF. BLR International Airport’s UDF will be increased in a phased manner over the next four years from April 2022 until March 2026 – which will make international flight tickets a bit pricier for outbound travel from Kempegowda Airport.
The UDF for outbound international passengers will gradually increase from Rs 1200 to Rs. 1500 – Rs 1200 in FY 2022-23, Rs 1400 in FY 2023-24, and Rs 1500 in FY 2024-25. However, the fee will be reduced to Rs 1050 by March 2026. The approved UDF for domestic travelers flying out of Bengaluru Airport is Rs 350 in 2022-23, Rs 450 in 2023-24, and Rs 550 in 2024-25. The domestic UDF will be reduced to Rs 385 in January 2026. The operator of Bengaluru Airport stated that the hike of UDF was inevitable in view of the depleting cash reserves and the reduced cash inflow.
In order to replenish the cash reserve and fund the terminal expansion projects, Hyderabad International Airport will gradually increase the User Development Fee starting on April 1, 2022. Notably, RGI Airport’s UDF hike is similar to Bengaluru Airport’s. International passengers flying out of Hyderabad will be paying Rs 700, instead of Rs 393, as the hiked UDF per flight ticket. It will further be increased up to Rs 1500 by December 2025. Hyderabad RGI Airport’s UDF is expected to fall to Rs 1000 in 2026. On the domestic front, Hyderabad Airport’s UDF is hiked to Rs 480 from Rs 281, which outbound domestic travelers will be paying through the year 2022. It will go up to Rs 750 by December 2025.
Kochi International Airport is also within the ambit of the UDF hike. Since October 2021, travelers flying out of Kochi have been paying the User Development Fee. Cochin Airport’s user development charges are considerably lower than Hyderabad and Bengaluru airports’ UDF hikes. The passengers of international flights departing Kochi will pay Rs 400 in 2022, which will jump up to Rs 570 in 2025 per ticket.
Mumbai International Airport will continue to levy UDF worth Rs 720 per ticket on outbound international travelers until March 31, 2022. Mumbai CSMI Airport’s UDF was supposed to be rolled back in March 2021, but the duration got extended through March 2022 due to the sluggish recovery of travel demand. The levy of UDF on outbound travelers is likely to be extended through the end of 2022.
Needless to say, the COVID-19 pandemic has been taking a toll on India’s aviation economy. In the first week of August 2021, India’s Minister of State for Civil Aviation revealed that Indian airports’ consolidated loss stands at Rs 3400 crore in FY 2021. The data that CAPA India, a leading aviation consultancy firm, provided in July 2021 is more appalling. Indian Airports incurred a whopping loss of Rs 7000 crore in FY 2021, which surpasses the operators’ profits worth Rs 5160 crore in FY 2020, according to a report by CAPA India. Undeniably, Indian aviation (rather, global aviation) will take a few years to fully recover from the pandemic blues.