User fee waived for Mumbai fliers
Following the revision in airport tariff by the Airport Economic Regulatory Authority (AERA) on Thursday, domestic passengers from Mumbai will not be charged a user development fee (UDF), while international passengers will pay half of the current levy.
Currently, domestic fliers from Mumbai are levied a UDF of ~274 (excluding service tax) which has now been done away with. International passengers pay a UDF of ~548 which has now been reduced to ~227 (excluding service tax). The international UDF will see a revision to ~218 and ~278 in FY18 and FY19, respectively. The UDF is included in ticket price and is a direct levy on passengers.
The new charges will come into effect from November 1, and are part of the tariff order for a five-year period extending till 2019. However, for passengers, the relief from reduced UDF could be short-lived as airlines might hike fares to bear additional charges imposed on them.
In order to compensate for the loss due to reduction in UDF, the Mumbai airport has proposed a revision in landing charges it collects from airlines and the same was approved by the airport regulator. Along with landing charges, airlines also pay common user terminal equipment charges and fuel throughput charges. Overall, the tariff has been reduced by 4.6 per cent.
Domestic airlines which operate Boeing 737- or Airbus A320-type aircraft will now pay double the amount on each landing, while rates for wide-body aircraft (flown on international routes) such as the Boeing 777 or Airbus A330 have been reduced by about 1520 per cent.
Mumbai International Airport Limited proposed reduction in charges on wide-body planes in view of capacity constraint at the airport and to encourage foreign airlines to start more services. Airlines, which will launch a new direct foreign route will get a waiver in landing charges for those flights for a year.
Helicopters and aircraft with less than 80 seats will not attract landing charges based on a government directive.
Amber Dubey, partner and India head of aerospace and defence at KPMG, said the order needs to be studied in detail but prima facie, it appears that there may be an insignificant impact on ticket prices.