Travelers flying from Bengaluru's Kempegowda International Airport (KIA) will have to bear steep airport charges for a longer period. The Airports Economic Regulatory Authority (AERA) has decided to postpone a planned reduction in user fees, meaning passengers will see no relief until at least the end of March 2026.
What the Deferment Means for Passengers
The current User Development Fee (UDF) of Rs 550 for domestic departures and Rs 1,500 for international departures will remain in force until March 31, 2026. This decision overturns an earlier schedule that would have lowered these charges in the final quarter of the 2025-26 financial year to Rs 385 and Rs 1,050, respectively.
In a recent order, AERA extended the existing tariff structure that was applicable from April to December 2025. This means all aeronautical charges, including landing fees, will stay unchanged for the January to March 2026 quarter as well.
Regulatory Reasons Behind the Decision
AERA cited significant capital expenditure and a revenue shortfall faced by Bangalore International Airport Ltd (BIAL) as the primary reasons for deferring the fee cut. The airport operator is undertaking a major expansion to transform Bengaluru into a hub airport, aiming to boost its annual passenger handling capacity from 51.5 million to 80 million by 2031.
In an official statement, a BIAL spokesperson defended the move, stating it aligns perfectly with regulatory norms. "The continuation of the existing UDF is fully in accordance with AERA's prevailing tariff order and established regulatory practice," the spokesperson said. The explanation highlighted that temporary adjustments are typically reviewed only in the final quarter of a control period to avoid financial over-recovery by the airport.
Financial Pressures and Passenger Mix
BIAL presented a multi-year tariff proposal (MYTP) to the regulator, outlining its financial landscape. The airport operator pointed to two key challenges:
- Heavy Capital Expenditure: The massive investment required for terminal and runway expansion.
- Revenue Shortfall: An increasing share of transfer or transit passengers, who contribute lower per-passenger revenue compared to originating travelers.
AERA's order acknowledged that while overall passenger traffic is meeting projections, the growing proportion of transit flyers is suppressing aeronautical revenues. The regulator noted that maintaining the current charges in Q4 of FY26 would help bridge this revenue gap and reduce carrying costs for BIAL.
Furthermore, BIAL revised its traffic forecast for the current financial year downward to approximately 46 million passengers, from an earlier estimate of 49.4 million, adding to the financial strain.
Impact on Airlines and Future Outlook
The fee freeze extends beyond passenger UDF. Landing charges will also remain static at Rs 510 per tonne for domestic flights and Rs 715 per tonne for international flights (for aircraft up to 100 tonnes), with higher slabs for heavier planes. This impacts airline operating costs, which could indirectly influence ticket pricing.
The decision underscores the financial balancing act in Indian aviation infrastructure, where funding large-scale airport expansions often relies on revenue generated from users. For Bengaluru's flyers, the dream of cheaper airport access is now deferred, with their fares continuing to support the city's aviation growth ambitions until 2026.
