Friday, September 01, 2017

Domestic flights to cost up to Rs 100 more from today as regional connectivity cess kicks in

New Delhi: Domestic flights between metros and other big cities will cost anywhere up to Rs 100 more from Friday. The government has decided to charge Rs 5,000 per domestic flight to create a regional connectivity fund (RCF) that will be used to provide viability gap funding to regional flights and help cap fares for such flights at Rs 2,500 per hour.
Apart from the regional cess, oil marketing companies hiked aviation turbine fuel (ATF) prices from Friday by a steep 4%. In Delhi, for instance, Indian Oil Corp site shows ATF will now cost Rs 50,020 per kilolitre (KL) for domestic airlines compared to Rs 48,110 on August 1. As a result, airfares in coming festive season could shoot up.
While airlines did not say how this hike will impact fares, they said any increased operating cost will have to be passed on to consumers. "The regional cess and hiked ATF prices coming into effect from Friday will mean increase in fares as demand for travel also shoots up in the festive season. Best will be for people to book tickets in advance as buying the same closer to date of travel will mean paying more," said an airline official. Airlines have different fare buckets for each flight and keep a certain number of seats in each fare bucket. As the seats on a flight get sold, fares move to the next higher level.
Meanwhile, the regional cess was kicked in by an order of Directorate General of Civil Aviation chief BS Bhullar which said: "Central government has decided to revise the date of levy on scheduled flights being operated within India to fund regional air connectivity fund at a uniform rate of Rs 5,000 per flight till further revision. The said levy will now come into effect from September 1, 2017. The amount already paid by airlines in pursuance to (previous) orders will be adjusted against them as per this order."
01/09/17 Saurabh Sinha/Times of India