The Bengaluru International Airport Limited (BIAL) has decided to reduce the User Development Fees (UDF) levied on the passengers flying out of Kempegowda International Airport, Bengaluru. The fees will be revised to the old rates.
The current UDF of Rs 1226 for international fares will come down to Rs 558. The present UDF of domestic passengers of Rs 306 will be revised to Rs 139, making the tickets a lot cheaper. The new reduced fee will come into effect from August 16, 2019.
In April, BIAL increased the UDF of the passengers for an interim term of four months, from April to July, to meet the capital expenditure of the expansion projects at KIA. The Airport Economic Regulatory Authority (AREA) approved BIAL’s decision to increase the UDF for the short term.
KIA has been undertaking various expansion projects that include the construction of Terminal 2 and associated projects, estimated at a value of Rs 13,000 crores. For the required CAPEX, BIAL raised Rs. 10,206 crores through a syndicate of banks, including the State Bank of India and Axis Bank. The project got funded via a debt-equity ratio of 80:20. Axis Bank has advanced Rs 5106 crores, SBI sanctioned another Rs 5100 crores. The debt, with a door-to-door tenor of approximately 14.25 years, will be repaid over ten years with a one-year moratorium, post completion of the project. The money collected as UDF was also added to the CAPEX to fund the project to a limited extent. The projects are scheduled to be closed by 2021.
Hari Marar, MD & CEO, BIAL, said, “The timely financial closure will enable us to focus on expansion and ensure that the projects are delivered within timelines.”
In 2018-19, the Bengaluru airport witnessed a flow of 33.3 million passengers, and the volumes are expected to grow in the coming years.