Civil Aviation Ministry will weigh in stakeholders' views on the ambitious regional air connectivity scheme before deciding on the quantum of levy to be charged from airlines to create a fund for the purpose.
Civil Aviation Ministry will weigh in stakeholders’ views on the ambitious regional air connectivity scheme before deciding on the quantum of levy to be charged from airlines to create a fund for the purpose.
The move comes against the backdrop of concerns in certain quarters that having a levy for funding Regional Connectivity Scheme (RCS) could push up airfares as carriers could pass it on to the passengers.
While unveiling the draft scheme on July 1, the Ministry had spoken of charging a levy, but did not propose any range or tentative quantum.
As part of the RCS, the government plans to provide Viability Gap Funding which would be financed through the Regional Connectivity Fund.
The Ministry would take a call on the quantum of levy after receiving the comments on the draft RCS, according to a senior official.
The levy could be in the form of per domestic departure from the airlines on certain profitable routes, he said.
Mooted in the new civil aviation policy, RCS — which would target 90 aerodromes — has been put up for stakeholders’ consultations including state governments, airlines and airport operators.
The Ministry expects to finalise the RCS by August after receiving stakeholder comments on the draft.
Under the proposed scheme, air ticket prices would be capped at Rs 2,500 for one-hour flights on unserved and under -served routes.
The Ministry would contribute 80 per cent of the VGF, while respective state governments would chip in with the remaining 20 per cent to the fund which will have a corpus of Rs 500 crore each year.
On July 1, Civil Aviation Minister Ashok Gajapathi Raju said RCF would be created for funding RCS “through levy on certain flights”.
There are 394 unserved and 16 under-served airports in the country.