New Delhi
The proposed cap of Rs 2,500 per air ticket on regional routes will be applicable only for carriers availing Viability Gap Funding (VGF) from the Civil Aviation Ministry, which expects to put up the final aviation policy for Cabinet approval in December.
Providing more clarity on the contours of regional connectivity scheme under the revised draft aviation policy, Civil Aviation Secretary R N Choubey on Friday said there would be no compulsion on airlines to cap fares on regional routes.
As part of efforts to boost regional connectivity, the government has proposed a 2 per cent cess on all air tickets and the proceeds would be utilised towards Viability Gap Funding (VGF).
"Capping (of air fares in regional routes) comes, which is justified, only when a carrier avails VGF from the government," he told reporters here.
The draft policy, unveiled last week, has mooted various measures to boost regional connectivity including setting up of no-frills airports and providing VGF for airlines.
Another proposal is to cap fare at Rs 2,500 for one-hour flight under regional connectivity scheme.
Through levying of two per cent cess starting from January 1, 2016, the government expects to raise about Rs 1,500 crore annually towards VGF.
"Our VGF commitment (to airlines) should not exceed the proceeds from the two per cent levy... Out of the total VGF, 80 per cent will be provided by Centre and the remaining amount by the concerned state," Choubey said.
