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Bangalore International Airport Ltd (BIAL) will not follow a cross-subsidization tariff policy – Bangalore Aviation

Bangalore International Airport Ltd (BIAL) will not follow a cross-subsidization tariff policy


According to Banglore HAL International Airport, the new Bangalore International Airport Ltd (BIAL) is likely to spare domestic passengers from the user development fee (UDF).

In recent days GMR Hyderabad International Airport Ltd’s (GHIAL) made its decision to charge $25 (about Rs 1,000) as UDF on international passengers from the new airport at Shamshabad, which is scheduled to launch commercial operations ‘next week’.

The BIAL, which is destined to launch its operations from 11 May 08, will not follow a cross-subsidization tariff policy. On the other hand there shall a charge of UDF amounting to INR675 on domestic passengers and INR955 on international passengers.

What has been found from the Chief Executive Officer (CEO) of BIAL Albert Brunner is that it would not be fair to levy charges on international passengers and save the domestic passengers when both of them would be using the same infrastructure. Speaking on this Brunner said, “The International Air Transport Association (IATA) can question airports if they charge a fee to international passengers and nothing to domestic passengers when both are using same facilities.”

Nevertheless, the recent developments are quite different to the statement of the BIAL Chief. This includes the forceful stances of the domestic carriers who are gearing up to lobby for a waiver of the fee on the domestic sector.

On this Ramki Sundaram, the Chief Financial Officer (CFO) of Deccan Aviation said, “The question is: What impact such a move (charging UDF from domestic passengers), would have on business, especially on short haul routes. Both (airport and airlines) would be at a disadvantage (business-wise). We have requested both airports to take a long-term view on this.”

(c) Centre for Asia Pacific Aviation. Date posted: 18-Mar-08.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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