Tuesday, November 15, 2016

Levy for regional connectivity to make air travel expensive

Domestic air travel is set to get costlier as the government has decided to impose a new levy per flight operation to fund its regional connectivity scheme (RCS).
The government plans to impose a levy of around Rs 7,500 per flight for travel up to a distance of 1,000 kms. Similarly the levy per flight journey between 1,000 kms and 1,500 kms would be Rs 8,000 and for distances above 1,500 kms the levy will be Rs 8,500.
According to the Ministry of Civil Aviation, the objective of RCS christened as UDAN (Ude Desh ka Aam Naagrik) is to enhance air passenger traffic in the country by stimulating demand on regional routes.
“Amount collected as Regional Connectivity Fund (RCF) will be used to provide financial support to airlines in the form of Viability Gap Funding (VGF) for operations under the scheme,” the ministry said.
As per the directions of the ministry, RCF will be funded by a small levy per departure on all domestic flights other than the ones on Category II / Category IIA routes under RDG, RCS routes and aircraft having maximum certified takeoff mass not exceeding 40,000 kg. The purpose of RCF is to channel funds generated from air travel to stimulate further growth and development of the air travel industry itself.
15/11/16 The Navihind Times