Delhi flights to get cheaper as govt plans to slash User Development Fee

Call this an early Christmas gift for those flying in and out of Delhi. Fliers will now pay a lot less for air tickets with the government ordering a flat rate for User Development Fee (UDF) in both international and domestic flights.

According to Airports Economic Regulatory Authority of India (AERA), from next year, domestic passengers will pay Rs 10 UDF and international passengers will pay Rs 45. The government has also ordered that there shall be no UDF charged to passengers arriving in Delhi, both domestic and international.

However, the implementation of new charges is in abeyance till disposal of appeal in previous tariff order. All airlines collect UDF from passengers and hand it over to the airport operator. “With regards to implementation of this order, the authority notes that the high court has permitted DIAL to charge the tariff applicable for the first control period till AERAAT decides on the appeals filed by DIAL and the high court has indicated a timeframe for Airports Economic Regulatory Authority Appellate Tribunal (AERAAT) to dispose the appeals.

The authority has appealed against this order of high court and depending upon the outcome of the legal process, the date of implementation of this tariff order will be decided,” AERA said in its order. According to AERA, the new charges will be applicable from January 2016 to March 2019 once the appeal gets disposed by AERAAT. “The authority has determined an X factor of +96.08 per cent as on the date of implementation of 01 January 2016 for the tariff order. However, based on the interim measure to help DIAL meet its estimated cash deficit of Rs 404.88 crore, the authority has decided to allow the X factor of +89.40 per cent to DIAL.

However, there is an order from high court permitting DIAL to charge the tariff applicable for the first control period till AERAAT decides on the appeals filed by DIAL and the high court has indicated a timeframe for AERAAT to dispose the appeals. The authority has appealed against this order of high court. Depending upon the outcome of the legal process, the date of implementation of this tariff order will be decided,” says the AERA report.

Report

The report adds: “The authority notes that for every month of delay in implementation, there will be further reduction in the X factor and the corresponding cash deficit would also have to be reworked and accordingly, a new tariff card would have to be implemented. Currently, the tariff card has been prepared and attached as of 01 January 2016, after providing for estimated cash deficit.”

Currently, passengers departing from Delhi airport have to pay Rs 275.30 -550.30 as user development fee (UDF) and those arriving from any city to Delhi pay Rs 232.94-465.90. Passengers on international flights have to pay Rs 635.32-1270.62 as UDF. As per the new tariff, if any passenger has bought ticket to Jaipur from Delhi for Rs 2000, he has paid Rs 275.30 as UDF which is included in airfare. After the implementation of AERA’s new order, the passenger will get the same ticket for about Rs 1,735 and there will be no charges on arrival for domestic or international passengers.

Response

Meanwhile, DIAL has reacted on the issue saying that high court has directed that the existing tariff shall continue till disposal of its appeal by AERAAT. “DIAL has appealed to AERAAT on issues related to tariff for first control period which has bearing on determination of tariff for second control period. Accordingly, high court has directed that the existing tariff shall continue till disposal of appeal of DIAL by AERAAT.

Read full article: Business Today