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Domestic flying to get dearer from December 1

November 12, 2016 05:08 AM

COURSTEYNov 12 2016 : The Times of India (Ahmedabad)
Domestic flying to get dearer from December 1
Saurabh Sinha
New Delhi:

Connections To Big Cities To Cost Rs 60-100 More
Come December 1 and taking domestic flights out of big cities, like the six metros, will cost anywhere between an extra Rs 60 and Rs 100. This money will be used to create a fund to implement the government's ambitious plan to put small towns on the air map.
Aviation secretary R N Choubey , the architect of Prime Minister Narendra Modi's pet regional connectivity scheme (RCS), said on Friday each scheduled flight between big cities would be charged Rs 7,500, Rs 8,000 and Rs 8,500 for distances of up to 1,000 km, 1,000-1,500 km and above 1,500 km, respectively , from December 1. This cess will be collected from airlines which, in turn, will pass the same on to flyers. While airlines said they were calculating the impact of this new fee, sources said it would lead to a Rs 60 to Rs 100 hike in fares. Also, the levy on airlines is linked to the consumer price index and will be revised from time to time depending on which way inflation goes.

“We expect to raise Rs 400 crore from this cess for the regional connectivity fund (RCF). In addition, another 20% of the funding will come from state governments. So we are roughly looking at about Rs 500 crore per year available in the kitty,“ Choubey said.

This money will be used to provide viability gap funding (VGF) to operators so that they can offer regional flights with a fare cap of Rs 2,500 per hour, or for covering 500 km. The RCS flights will be for distances between 200 km and 800 km.

The fare cap and VGF range is as follows: for a 200 km flight, a fare cap of Rs 1,770 with VGF of Rs 1,810; and for flying 800 km, a fare cap of Rs 4,070 and VGF of Rs 4,170. The fare cap of Rs 2,500 is for flights covering about 500 km in an hour; for this the VGF offered will be Rs 3,790 per flyer.

TOI had first reported -on March 19, 2016 -that the government planned a Rs 8,000 levy per flight as an alternate to the earlier proposal of a 2% surcharge on tickets

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