VGF rider for regional airfare cap

Only those carriers which opt for viability gap funding (VGF) under regional connectivity scheme needs to cap the tickets at Rs 2,500 for one-hour flights.

Civil Aviation Secretary R N Choubey said there would be no compulsion on airlines to cap fares on regional routes. Choubey’s clarification came following revised draft civil aviation policy proposing a cap of Rs 2,500 for one-hour flights.

“Capping comes only when a carrier avails VGF from the government,” he told reporters. The draft had proposed a 2 per cent cess on all air tickets and the proceeds would be utilised towards Viability Gap Funding (VGF). According to the draft policy, the government expected to raise Rs 1,500 crore annually towards VGF. He said the government expects to revive 50 airports in the first two years.