Deprecated: Hook custom_css_loaded is deprecated since version jetpack-13.5! Use WordPress Custom CSS instead. Jetpack no longer supports Custom CSS. Read the documentation to learn how to apply custom styles to your site: in /var/www/wp-includes/functions.php on line 6078
BIAL should not UDF itself out of the market – Bangalore Aviation

BIAL should not UDF itself out of the market

Air travel in India has boomed due to the introduction of low cost airlines (LCCs) which have opened air travel to the masses. Their air fares are highly competitive with the upper classes of train fares. Even United Progressive Alliance chairperson Sonia Gandhi said, air travel was not elitist any more, when inaugurating the new airport at Hyderabad. Despite this boom, less than 2% of India’s population travels by air.

Despite many requests from the Ministry of Civil Aviation, the BIAL consortium wants to levy a User Development Fee which I can only describe as excessive.

Currently air passengers in India pay a Passenger Service Fee (PSF) of Rs. 200 + 12.24% Service Tax, for a total of Rs. 225. Out of this 200, Rs. 130 goes to the Central Industrial Security Force and Rs. 70 to the airport operator.

BIAL wants to charge departing passengers both UDF and PSF – totalling, Rs. 983 for domestic and Rs. 1,298 for international, a 437% and 577% increase respectively. In year 1 alone the fees add up to Rs. 524 Crore, and rise to Rs. 856 Crore by year 5. i.e. in these 5 years, the passengers from Bangaore, will pay to BIAL an amount greater than their investment in the airport till date. The justification for these high charges is “a state of the art world class airport”.

These prices make BIAL one of the most, if not the most, expensive airport in the world. Add to this the cost to get to the airport at approximately Rs. 800 or higher, depending on your mode of transport. Therefore a passenger will have to spend total of about Rs. 1,800. The airfare to most regional destinations from Bangalore are around Rs. 1,800 – Rs. 2,500.

BIAL is pricing itself out of the reach of the very public it is meant to serve and by extension its main customers — the airlines.

The high charges proposed at the new GHIAL airport at Hyderabad has already led to a revolt by airlines, who are refusing to operate at the new airport, thus leading to a delay in launch, minutes after being inaugurated.

In Bangalore, low cost airlines are experiencing a 35% drop in their short-haul bookings, and have indicated that they will cut back their operations to Bangalore and deploy their aircraft to other airports.

What is the point of having an exclusive “5-star cost” airport which drives away both the passenger and the airline thus hurting the public interest instead of serving it ?

Does it not make sense to keep a low featured low cost airport like HAL in operation ? After all, as statistics show, there is plenty of demand to make both airports viable.

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.

Check Also

In new strategy Etihad invests in Darwin Airlines, re-brands it Etihad Regional

by Devesh Agarwal Etihad Airways, the national carrier of the United Arab Emirates, today announced …

No comments

  1. I would not like to spend more than 1 hour on travelling to or from the Airport, wherever its located, unless the inconvenience is for a definite number of months as guaranteed by the Government. Since the Government controls all aspects affecting project completion except earthquakes, war and other acts of God, no one is better empowered to decide on the solutions and implementation timeframes than the Government.

    I realize that when we get involved in issues to the extent of analyzing them and attempting to provide solutions, we are actually de-focussing from the key issues and generating sound bytes and confusion. These then become additional issues that the Government must find solutions to. In fact, WE would like the Government to solve these new issues even before considering the original ones. If you examine Gandhiji’s Freedom Movement, he only made it about absolute opposition & non-cooperation to British Rule. He didn’t enter into a discussion about whether the British should leave India by Boat, Air or Train, nor did he start up an opinion poll on the logistics of moving lakhs of Englishmen back home.

    The questions we should be asking the Government should be few, powerful and probably sound like
    ” When will the New Airport be ready?”
    ” When will the connectivity infrastructure be ready?”
    ” Will you provide an alternate airport till the infrastructure is ready?”

    These are questions that need positive & real answers, answers which the Government can provide only after due deliberation, and answers that would really and indisputably fix responsibility on the ruling party. Maybe an opinion poll on the “Best questions to be asked of the Government” would be a good idea.

  2. There is more than enough commerce in Bangalore to support another airport. Speeding up travel of people and products only improves an economy.
    The market place, consumers and producers, determine usage. Government can implement rules of conduct (procedures) but no one, including the self-proclaimed smartest people in the world often found work in government, can accurately predict a marketplace. The market place determines itself.
    If consumers of airport services do not find the airport a convenient and profitable place to do business, it will not be used.