Govt mulls two per cent cess on air tickets

Last Updated : 27 August 2015, 12:52 IST
Last Updated : 27 August 2015, 12:52 IST

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Fliers may have to shell out more with the government mulling to impose a two per cent cess on air tickets as part of the new civil aviation policy, which is in the advanced stage of finalisation.

The money raised through the cess would be utilised for viability gap funding of domestic carriers operating flights to regional and remote areas.

Sources said the Civil Aviation ministry is looking at levying two per cent cess on air tickets and the proposal is being considered as part of the new aviation policy.

Such a move could push the ticket prices higher, making air travel more expensive.
Under the new policy, the government is looking at enhancing air connectivity to regional and remote areas such as the North East, apart from measures to boost the domestic aviation sector.

According to sources, the money garnered through cess would be utilised to provide airlines, that fly to remote areas, with viability gap funding.

Sources also said that as part of the policy, the government is weighing various options to tweak the international flying norm for domestic airlines.

At present, Indian carriers who have completed five years of domestic operations and have at least a fleet of 20 planes are eligible to fly on international routes.

Now, one of the options being looked at is the possibility of reducing the mandatory requirement of five years operational experience, sources said.

Established players like Jet Airways and IndiGo are opposed to any change in the current norm, popularly known as 5/20 on the grounds that any such move would "vitiate" the existing level-playing field and only favour new entrants.

On Tuesday, the ministry made a presentation to Prime Minister Narendra Modi on the draft aviation policy.

With the Prime Minister suggesting certain changes, a group of secretaries is expected to go through the revised draft before it is put up for stakeholder consultations. 

Published 27 August 2015, 12:52 IST

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