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Government plans to cap one-hour flight tickets at Rs 2500; proposes to impose 2% cess on airfare

Government plans to cap one-hour flight tickets at Rs 2500; proposes to impose 2% cess on airfare

Civil Aviation Secretary RN Choubey said the ministry has proposed 2 per cent levy on all domestic and international tickets for regional connectivity scheme.

New Delhi: Prices for air travel are likely to go up as the government has proposed a 2% cess on air tickets for funding regional connectivity scheme.

The government on Friday announced a new aviation policy and proposed to cap fare at Rs 2,500 for one-hour flight under regional connectivity scheme.

It is also proposing to spend Rs 50 crore to make no frill airports in smaller place and to revive unused airports. The airlines will also be allowed to get into partnerships with foreign airlines.

Presenting the revised draft national aviation policy, Civil Aviation Secretary RN Choubey said the ministry has proposed 2 per cent levy on all domestic and international tickets for regional connectivity scheme.

"The government expects about Rs 1,500 crore annually from charging 2 per cent levy " Choubey added. The policy has mooted various measures to boost regional connectivity including setting up of no-frills airports and providing viability gap funding for airlines.

However, the government has decided to seek more comments from stakeholders before taking a final call on 5/20 norms -- whereby local airlines can fly overseas only when they have five years operational experience and at least a fleet of 20 aircraft.

The policy has now mooted three options -- abolish the norm completely, continue with it or link overseas flying rights with domestic flying credits.

The draft policy would be put up for comments from stakeholders for three weeks.

first published:October 30, 2015, 12:45 IST