Bengaluru airport cuts base UDF, but expansion projects will add future passenger levies
AERA has lowered Bengaluru airport’s base user-development fee from September 2026, while allowing BIAL to levy project-linked charges after new capacity comes online. The ₹18,600 crore expansion programme could support higher passenger throughput—and airport retail footfall—despite added future levies.
What happened
Bangalore International Airport Ltd (BIAL) · AERA cut Bengaluru airport’s base UDF from September 2026 while allowing BIAL to add project-linked UDF and landing
Key facts
- Domestic departure UDF: ₹300 from 1 September 2026, versus ₹550 currently
- International departure UDF: ₹997, versus ₹1,500 currently
- Domestic arrival UDF: ₹125; international arrival UDF: ₹426
- Baseline domestic departure UDF falls to ₹160 from 1 May 2030
- Approved capex: over ₹18,600 crore
- FY2025-26 passengers: 44.47 million, up 6.2% YoY
- T2 Phase 2 incremental domestic departure UDF: ₹166
- ECT incremental domestic departure UDF: ₹15
- T2 Phase 2 apron incremental domestic departure UDF: ₹20
Why this matters
The capacity build-out creates opportunities for airport retail, F&B and services partnerships, with deal timing aligned to phased project commissioning from 2029.
What to watch
- Monthly Bengaluru airport domestic and international passenger growth versus the FY2025-26 base of 44.47 million passengers.
- Actual implementation of the ₹300 domestic departure UDF on 1 September 2026 and any changes to international or transfer-passenger charges.
- AERA orders specifying the size, timing and passenger segments subject to project-linked levies.
- Expansion construction milestones, terminal commissioning schedules and incremental annual passenger-capacity additions.
- Airline seat-capacity growth, route additions and low-cost-carrier share at Bengaluru.
- Concession tender activity, retail lease rates and announced tenant mix for new capacity.
- Prioritize domestic-departure retail formats with fast transaction times, including grab-and-go F&B, beverages, travel essentials and digital-order pickup.
- Use the 2026 UDF reduction as a planning window to secure retail concessions, premium locations and supply-chain capacity ahead of expected terminal expansion.
- Segment offers for domestic leisure passengers and first-time flyers, whose discretionary spending is most sensitive to changes in total travel cost.
- Build phased store-opening plans tied to terminal commissioning dates rather than committing full expansion capital before 2029.
- Monitor retail sales per departing passenger separately from total passenger traffic to identify whether future levies are reducing discretionary airport spend.