I read the following story in the TravelBizMonitor (TBM) with a big pinch of salt.

In paragraph two of the TBM article, Dr. Vijay Mallya, Chairman, Kingfisher Airlines, is quoted as saying he is completely against charging the UDF as part of the ticket. Yet airlines are perfectly at ease over-charging passengers a "transaction fee" to cover the travel agent commission, even when you do not fly and turn the ticket in for a refund (See my articles 1 and 2 on this subject).

Travel agents too are an external agency just like BIAL would be. What justification do the airlines have to offer for this blatant discrimination against BIAL ?

Bengaluru International Airport will charge UDF for domestic passengers
Implementation date and amount to be decided
By TBM Staff | Bangalore
Bengaluru International Airport (BIA) will charge a User Development Fee (UDF) for domestic passengers but the amount and the date of implementation is yet to be decided. The decision is still being reviewed by the Ministry of Civil Aviation (MoCA) and the operator is awaiting the decision. “Although it is a new concept for Indian domestic passengers the concept was agreed upon while signing the concession agreement. We realise that the aviation industry is witnessing a slow down and the carriers are facing constraints but the airport too requires the UDF for its functioning and future growth,” informed Albert Brunner, CEO, Bangalore International Airport Limited.

The Directorate General of Civil Aviation (DGCA) had earlier issued a notice to all domestic airlines asking them to collect the fee while issuing their tickets. The GMR Hyderabad International Airport in Hyderabad is already charging UDF of Rs 375 for domestic passengers as part of the ticket cost. The passenger is allowed to pay the fee either before checking in or after collecting the boarding card. It is yet to be seen how Bengaluru International Airport will collect the fee from passengers. “We are not against the concept of UDF for domestic passengers but we will not incorporate it as part of the fare. BIA can collect it on their own,” said Vijay Mallya, Chairman, Kingfisher Airlines, at a recent press conference announcing the launch of the airlines’ international operations.

In the same article, TBM reports
Meanwhile the expansion plans of BIA are still going strong. The first expansion of the apron is already underway and is expected to be completed shortly. The second phase of expansion will include extending the current terminal building to accommodate the increase in passenger traffic. The operator is confident of handling the passenger traffic for the next couple of years with the existing infrastructure. It will also construct a second terminal and runway, which will take at least another three to four years.

I do not know if something has changed in the last month. When I visited BIAL on the 6/Sep, all work on the apron was stopped. (See my visit report). Quoting from my visit report :

While driving around, I observed that the apron extension to the west of the PTB, is on hold. I was told "we are waiting for the UDF issue to be resolved". For brief while, I had the disturbing question floating in my head. Is BIAL out of money ?

I later learnt from some people at the airport (who shall remain anonymous), the apron expansion was given to some fly-by-night contractor and not L&T who constructed the first apron. Cost was the reason, for awarding the contract, and also the contractor fleeing, when he realised the true magnitude of work.

Can some from BIAL confirm, via a comment, if the apron expansion work has re-started.

TravelBizMonitor has provided a break-up on the Travel Agent Transaction Fee.

As per the decision, travel agents will now charge a Transaction Fee of Rs 350 per ticket on domestic Economy Class, Rs 500 per ticket on domestic Business Class, Rs 2,500 per Economy Class booklet and Rs 3,500 per Business Class booklet. Interestingly, tickets purchased for SAARC, which include Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka will be included under domestic travel. On international tickets, Economy Class that falls under TC1, which includes North and South America, Australia and New Zealand and TC2, which includes Europe, Taiwan, Japan, Korea and Africa and South West Pacific will be charged Rs 2,500 and TC3, which includes Middle East, South East Asia and China will be charged Rs 1,200. On international Business tickets for TC1 and TC2, the charge will be Rs. 5,000 while for TC3 will be Rs 2,000. International First Class tickets will be charged a fee of Rs 10,000 on TC1 and TC2 (Including South West Pacific) and Rs 5,000 on TC3 category.

But what is positively disgusting is that the transaction fee will not be refundable and can be charged over and over again.

It has also been decided that the Transaction Fee will not be refundable and will be retained by travel agents, even when a ticket is processed for refund. The agents can charge a fee over and above the cancellation charges for any modification or cancellation. The airlines will also charge the same Transaction Fee at the City Traffic Office, Airport Traffic Office and the website.

The air transport cartel is at it, again. In all too familiar theme, we passengers must get ready to pay one more "fee".

Readers will recall that airlines decided to scrap travel agent commissions, in India, effective October 31, 2008. This move by the airlines, created an uproar in the industry and led to strikes and protests. Presently, airlines pay 5% of the base fare as sales commission on tickets issued by travel agents, without any charge to passengers.

According to the Deccan Chronicle, airlines and travel agents have mutually decided to add a new component, to be called a "transaction fee", which would be a minimum of Rs 350 for domestic and maximum of Rs 10,000 for international tickets, which will replace the existing commission.

The transaction fee will be euphemistically reflected as “other charges” on the ticket. This is over and above, other fees and surcharges like fuel surcharge, air traffic congestion surcharge, user development fee, and passenger service fee, already charged to passengers.

God forbid, the airlines defile the holy altar of "low air fares" and incorporate all these charges, which make up almost 75% of the total cost of the ticket, in to their fares.

Reportedly, the transaction fee will be at least Rs 350 on domestic air tickets for the economy class, and Rs 500 for business class.

The fee on international air tickets will be Rs 1,200-2,400 (economy), Rs 2,000-5,000 (business) and Rs 5,000-10,000 (for first class tickets). These charges will be uniform across airlines, including low-cost carriers such as SpiceJet, Indigo, Kingfisher Red, etc.

At a time when everyone is cutting back on expenses, with this new arrangement, travel agents will earn double of what they are getting right now, all for no additional effort, and all of it, on us, passengers' backs.

If you think you can avoid this mutual back-scratching "fleece the passenger party", and book directly from the airlines' websites or offices, think again. Air tickets booked through airline websites or their offices will also attract the transaction fee, and conveniently, this fee will be earned by the airline. Oh what joy. The competition which allows me to differentiate between good and bad travel agents, and enables me to demand value for money service, is simply overwhelming.

I wonder why is Mr. Patel asking for tax relief on aviation fuel ? By asking their passengers to needlessly pay even more, the air transport industry in India, seems to have already overcome this perfect storm of slowing demand coupled with rising costs.

See related story "Travel agents need to earn their income"