All about CUTE, ASF, PSF and other charges airlines collect

CUTE fee is sometimes also referred to as passenger handling fee.

Social media is often taken by storm when someone asks about CUTE charges of airlines or one or the other charges that make up the total fare.

CUTE or Common User Terminal Equipment charges include charges for the use of metal-detecting machines, escalators and other equipment at airports. CUTE fee is sometimes also referred to as a passenger handling fee.

Airline social media teams take great pains to explain that these are charges collected on behalf of other agencies and passed on, and the airlines themselves earn much lower from the final fare passengers pay.

One such charge is Aviation Security Fee (ASF), which will be Rs 236 on domestic tickets. This is used to pay the Central Industrial Security Force (CISF), tasked with protecting most major airports in the country, except for a few which have RCS (Regional Connectivity Scheme) flights and are under the state police.

How much is ASF and whom is it charged from?

ASF differs for domestic and international passengers. For domestic passengers, it is Rs 200, while for international passengers it is $12 or its equivalent in Indian rupees. There is a GST of 18 percent on the domestic charge, which makes it Rs 236 when collected.

ASF is levied only from embarking passengers and not from arriving passengers.

While it is to be charged from every embarking passenger, there are few exceptions. Children under the age of two are exempted from this, since they travel on infant fare and not get a full seat for themselves.

Also exempted are those who have diplomatic passports and persons travelling on duty in Indian Air Force aircraft or personnel travelling for United Nations peacekeeping missions.

Airline crew on duty and sky marshals are exempted from this charge, but airline crew travelling off duty or deadhead have to pay the charges. In such cases, since the crew is not travelling on a revenue ticket, the airline pays for this charge.

Transit passengers need to pay this fee only once, provided they have a single ticket for the entire journey and the connecting time is up to 24 hours. In case of diversions of any kind where an additional airport has to handle the passengers, no fee is charged to the passenger.

Why are airlines collecting these charges?

Airlines collect various charges from passengers for the sake of convenience. Otherwise, passengers will be required to pay the money at the time of departure, making the process cumbersome, inefficient and stressful.

Airlines collect many other fees, like CUTE fee, for using common user terminals at airports and State and Central GST, which is then paid to the respective authorities as per prescribed norms.

While the passenger service fee (PSF) is different at different airports and they are approved by the AREA (Airport Economic Regulatory Authority), ASF is the same across all airports

What is PSF?

PSF or passenger service fee is an amount collected from each embarking passenger at airports by airlines. The PSF has two components -- security component (SC), which constitutes 65 percent and facilitation component (FC), which is 35 percent of the total charge.

How much ASF has been collected and how is it utilised?

The exact amount is not declared by either the trust handling the money or the government on a periodic basis. In April last year, Union Minister of State for Home Nityanand Rai said in Lok Sabha that Rs 2,430 crore have been collected from passengers in the preceding two years and deposited in the National Aviation Security Fee Trust (NASFT). The CISF had a sanctioned strength of 30,996 in April last year.

The money is deposited in the trust which ensures distribution against the services. The CISF was raised in 1969 with the primary objective of providing security to public sector undertakings (PSUs). As the threat perception increased at airports, the security cover was provided by the CISF, replacing the state police force.

To ensure that taxpayers do not fund the security of airports, which are also national assets like the PSUs, ASF was introduced.

Tail note

As airports are forced to invest in newer equipment -- be it X-ray machines or full-body scanners -- this money won’t be utilised for those purchases. Instead, airports will have to shell out money from their own kitty and this money exclusively caters to the security apparatus provided by the CISF to the airports.

The International Air Transport Association (IATA) had objected to the increase in ASF, which came into effect in April 2021, stating that it would impact passengers negatively. While the cost has indeed gone up, passenger numbers indicate that there has not been an adverse impact on flyers thus far.