The Airports Authority of India (AAI) is planning to increase the user development fee (UDF) and landing charges at Chennai airport. At present, the UDF for both domestic and international passengers is Rs 77.
The new UDF effective January 1, 2013, for domestic passengers will be Rs 165 and for international this will be Rs 667, stated an AAI document.
The AAI has proposed to increase the international landing charges by 118 per cent and domestic landing charges by 48 per cent from November 1, 2012. Besides, it has proposed a uniform increase of 83 per cent in parking and housing charges.
The Bank of America Merrill Lynch in a report said this would have a marginal impact on the aviation sector in India. This is because Chennai accounts for only seven per cent of India’s traffic and the UDF could immediately be passed on to the consumers.
The AAI has justified the increase stating it was taking up modernisation and expansion of the Chennai airport, comprising domestic and international terminal buildings, elevated corridor and allied works including consultancy, extension of runway and construction of a bridge on the Adyar river at a total cost of Rs 2,862.71 crore. This also includes Rs 311.71 crore towards re-carpeting of the main runway; reconstruction of taxiways and a parallel taxi track for the main runway, and Rs 536 crore towards upgrading cargo facilities.
Post modernisation, the AAI said the capacity of the new domestic terminal building would be 10 million passengers per annum while the international terminal would cater to 4 million passengers. After completion, the total capacity of the airport would be 23 million passengers per annum (16 million domestic and 7 million international).
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J Krishnan, former president of Air Cargo Agents Association of India, said AAI had submitted they do not hold profit and loss account for any individual airport reflecting the true cost and revenues. It also claimed it had only consolidated balance sheet of all the airports under its control.
“This highlights that the UDF sought to be introduced/enhanced is based on price distortion. The UDF is not applicable across airports controlled by AAI and, hence, based on consolidated financial figures, the validity of imposing the UDF on passengers using Chennai airport is unfair and inequitable”, said Krishan.