Airlines discriminate against BIAL on UDF collection

I read the following story in the TravelBizMonitor (TBM) with a big pinch of salt.

In paragraph two of the TBM article, Dr. Vijay Mallya, Chairman, Kingfisher Airlines, is quoted as saying he is completely against charging the UDF as part of the ticket. Yet airlines are perfectly at ease over-charging passengers a “transaction fee” to cover the travel agent commission, even when you do not fly and turn the ticket in for a refund (See my articles 1 and 2 on this subject).

Travel agents too are an external agency just like BIAL would be. What justification do the airlines have to offer for this blatant discrimination against BIAL ?

Bengaluru International Airport will charge UDF for domestic passengers
Implementation date and amount to be decided
By TBM Staff | Bangalore
Bengaluru International Airport (BIA) will charge a User Development Fee (UDF) for domestic passengers but the amount and the date of implementation is yet to be decided. The decision is still being reviewed by the Ministry of Civil Aviation (MoCA) and the operator is awaiting the decision. “Although it is a new concept for Indian domestic passengers the concept was agreed upon while signing the concession agreement. We realise that the aviation industry is witnessing a slow down and the carriers are facing constraints but the airport too requires the UDF for its functioning and future growth,” informed Albert Brunner, CEO, Bangalore International Airport Limited.

The Directorate General of Civil Aviation (DGCA) had earlier issued a notice to all domestic airlines asking them to collect the fee while issuing their tickets. The GMR Hyderabad International Airport in Hyderabad is already charging UDF of Rs 375 for domestic passengers as part of the ticket cost. The passenger is allowed to pay the fee either before checking in or after collecting the boarding card. It is yet to be seen how Bengaluru International Airport will collect the fee from passengers. “We are not against the concept of UDF for domestic passengers but we will not incorporate it as part of the fare. BIA can collect it on their own,” said Vijay Mallya, Chairman, Kingfisher Airlines, at a recent press conference announcing the launch of the airlines’ international operations.

In the same article, TBM reports
Meanwhile the expansion plans of BIA are still going strong. The first expansion of the apron is already underway and is expected to be completed shortly. The second phase of expansion will include extending the current terminal building to accommodate the increase in passenger traffic. The operator is confident of handling the passenger traffic for the next couple of years with the existing infrastructure. It will also construct a second terminal and runway, which will take at least another three to four years.

I do not know if something has changed in the last month. When I visited BIAL on the 6/Sep, all work on the apron was stopped. (See my visit report). Quoting from my visit report :

While driving around, I observed that the apron extension to the west of the PTB, is on hold. I was told “we are waiting for the UDF issue to be resolved”. For brief while, I had the disturbing question floating in my head. Is BIAL out of money ?

I later learnt from some people at the airport (who shall remain anonymous), the apron expansion was given to some fly-by-night contractor and not L&T who constructed the first apron. Cost was the reason, for awarding the contract, and also the contractor fleeing, when he realised the true magnitude of work.

Can some from BIAL confirm, via a comment, if the apron expansion work has re-started.

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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