Govt proposes levy to fund regional air connectivity scheme

Flyers will soon have to shell out slightly more for tickets to fund the government's ambitious regional connectivity scheme under which airfares will be capped at Rs 2,500 for one-hour flights on unserved and under-served routes.
The government today unveiled the draft Regional Connectivity Scheme (RCS), which was mooted in the new civil aviation policy, for consultations with the stakeholders', including state governments, airlines and airport operators.
The stakeholders have been given three weeks time to submit their comments and suggestions on the draft scheme, which is expected to be finalised by August.
"The fare for a one-hour flight of approximately 500 kilometre on a fixed-wing aircraft or on a 30-minute helicopter ride has been fixed at Rs 2,500," Union Civil Aviation Minister Ashok Gajapathi Raju said while unveiling the draft scheme here.

He added that fares for other route lengths or durations will be priced proportionately (though not linearly).
"The states are interested in connectivity ... Their feedback will also be taken into account. The central government cannot bypass the state. We will take them into confidence and work along with them to make this (RCS) happen," Raju said.

The proposed scheme would be applicable for air services connecting "unserved and under-served routes" ranging from 200 to 800 km, while there would be no lower limit for hilly, remote, island and security sensitive regions.
"There are 31 airports inactive as of now. So, inactive airports will become low hanging fruits in different states," said Raju.

There are 394 unserved and 16 under-served airports in the country. "Of the total 410 airports, the scheme is demand driven. Wherever the state governments and airlines are coming forward for making them functional, we would be very happy to revive those airports," Civil Aviation Secretary R N Choubey said.
Choubey added that there are about 30 such airports which can be used for operations without incurring any extra cost on their revival.
The government has also announced that it would provide funds for revival of another 60 airports, Choubey said, adding that 90 airports are already targeted of the total 410.

Under the proposed scheme, the government would be providing Viability Gap Funding (VGF) -- which would be financed through Regional Connectivity Fund (RCF).
Raju said RCF would be created for funding RCS "through levy on certain flights".
In this regard, the government would be charging a levy in the form of per domestic departure from the airline and the move is expected to push the airfares marginally higher.