Indian govt’s Rs 8,500 levy per flight to hike airfares

Published on : Saturday, November 12, 2016

indian-flight-to-hike-airfaresIn order to fund the regional air connectivity scheme, the government of India has decided to levy up to Rs 8,500 (US$126) per flight on major routes, the Press Trust of India (PTI) reported.

 

Civil Aviation Secretary R N Choubey on Friday said the levy would be up to Rs 8,500 per flight depending on distance. The levy amount would be for an entire flight and the price of each ticket could go up depending on the number of seats in that particular flight.

 

“The levy for an up to 1,000 kilometre length of scheduled flight will be Rs 7,500 (US$111) per flight, Rs 8,000 (US$119) for a 1,000 to 1,500 kilometre flight and Rs 8,500 for flights above 1,500 kilometre,” Choubey said in New Delhi.

 

With the levy, the government estimates to Have Rs400 crore (Rs4 billion = US$59.52 million) for Regional Connectivity Fund (RCF) created for UDAN. RCF is to be funded by the Centre and respective state government participating in UDAN.

 

The ambitious scheme — UDAN (Ude Desh ka Aam Naagrik) — seeks to connect small cities by air as well as make flying more affordable for the masses.

 

The move would push airfares slightly higher as airlines are expected to pass on the burden to fliers.

 

The fares of half of the seats operated in a particular flight under UDAN would be capped at Rs 2,500 (US$37) for one-hour duration. This cap would be applicable for distance of 476-500 kilometres.

 

The limit of RCF airfare would vary from Rs 1,420 to Rs 3,500 for fixed-wing aircraft. For helicopters, half-an-hour ride under the scheme would cost Rs 2,500 (US$37) and for over one-hour duration, the cap would be Rs 5,000 (US$74).

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