Govt airports can now charge user development fee

The Airports Authority of India (AAI) is entitled to charge airport development fee (ADF) and user development fee (UDF) like the developers of private airports, according to the Airport Economic Regulatory Authority (AERA) chairman.

“Since AERA can’t make any distinction between private and public-owned airports, same principles in determination of ADF and UDF will be followed by it,” AERA Chairman YS Bhave told Business Standard yesterday.

AERA had received proposals from AAI to charge UDF at Thiruvananthapuram and Ahmedabad airports, Bhave said. He said AERA, in its consultation paper, proposed a UDF of Rs 755 per departing international passenger from Thiruvananthapuram airport. Yesterday was the last day for receiving comments on the consultation paper.

The civil aviation ministry allowed AAI to charge UDF at Jaipur airport, which has a passenger throughput of less than 1.5 million. Applications (for charging UDF) by airports with passenger throughput in excess of 1.5 million are referred to AERA by AAI.

According to Bhave, ADF is a capital receipt and since it is collected as a capital from passengers, it is not taken into account while determining the regulatory asset base (RAB). RAB is the basis of calculating the fair rate of return for airport operators.

UDF, according to Bhave, is a revenue receipt meant to bridge the gap between the required revenue and the actual revenue for the purpose of a fair rate of return. He reiterated that AAI would be in a position to charge UDF.