Govt imposes new levy on airlines to fund flights to small cities; airfares to rise

The UDAN scheme is likely to be introduced in January and seeks to connect small cities by air as well as make flying more affordable for the masses.

By: Express Web Desk | New Delhi | Published:November 11, 2016 2:21 pm
air fares, air fares increased, change in air fairs, flight fares, flight prices, change in flight prices, aviation news, business news (Representational Image)

Popular air routes such as Delhi, Mumbai, Chennai, Hyderabad, Bengaluru and Kolkata, are set to become a little more expensive. On Friday, the government announced a new levy — up to Rs 8,500 per flight — that will be imposed on airlines to fund its regional air connectivity scheme, UDAN (Ude Desh Ka Aam Naagrik).

The UDAN scheme is likely to be introduced in January and seeks to connect small cities by air as well as make flying more affordable for the masses.

Civil Aviation Secretary R N Choubey said the levy would be fixed for the airlines depending on the distance of each flight. For flights between 1,000-1,500 km, the levy will be Rs 8,000 and for flights beyond 1,500 km, it will be Rs 8,500, he said. A levy of Rs 7,500 will be imposed on flights of up to 1,000 km. The government expects to collect around 400 crores per year from these new tariffs.

Choubey said the government would be creating the Regional Connectivity Fund (RCF) for UDAN.  “In addition to this, another 20 per cent (funding) will come from state governments. We are roughly looking at around Rs 500 crore per year available in the kitty,” he added. Airfares are expected to rise slightly as airlines are most likely to pass on the burden of the new levy to fliers.

 

 

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  1. B
    Barb Dewyre
    Nov 11, 2016 at 1:26 pm
    If everything is to be funded by cess or levies, why do we pay tax? When oil is cheap, they raise the excise. When the rupee weakens or the oil prices rise, they increase the price at the pump. Modi and Jaitley have already taken the common man for a ride. No need for connectivity.
    Reply
    1. M
      mumbikar
      Nov 11, 2016 at 9:05 am
      Any bullock carts for , since cannot afford petrol or diesel either
      Reply
      1. M
        mathimathi
        Nov 11, 2016 at 3:46 pm
        Even bus conductors refused to exchange for Rs 2000 today. why think about airlines.
        Reply
        1. S
          Sukumar Hazra
          Nov 11, 2016 at 1:06 pm
          Central Govt took it grated that people can be taxed by any means as per humes of ministers, the easiest way to have fund.
          Reply
          1. T
            Taaza Khabar
            Nov 11, 2016 at 1:02 pm
            How do I get a Frequent Flier card for Air India One? Then I don't need to buy an air ticket and I will see many countries before May 2019!!
            Reply
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