Airlines, IATA oppose levy of tax on fliers from major cities to fund scheme

The Government’s proposal to levy a tax or fee on flyers between major cities to fund the regional connectivity scheme has been opposed by a number of Indian airlines and the International Air Transport Association (IATA).

Ajay Singh, Chairman, SpiceJet, told newspersons, when the Government proposes to launch a scheme like Regional Connectivity it needs to fund it from its own budget instead of imposing more tax on consumers. “We oppose it from the perspective that there could surely be other ways to fund something which is nationally so important,” he said.

Expressing strong views on the issue, Alexandre de Juniac, Director-General and Chief Executive Officer, IATA, said the scheme would be paid for by some airlines and the money distributed among others. “We know who is paying but we are not sure who will be receiving it,” the IATA D-G said.

IATA officials added that for developing sustainable connectivity in any location one needs to have a cost structure that allows one to do it.

To fund the Regional Connectivity Scheme, the Government has proposed creating a fund, monies for which will from levy or fee per departure on domestic routes. Besides, if the Government was to earn a premium from the allotment of additional flights on international routes, the same will also go towards the fund for RCS.

RN Choubey, Secretary Civil Aviation, told media persons, “the rules (concerning the levy per departure) will be printed in the Gazette in another two days (before October 31) and the executive order will be issued indicating the exact amount which will be levied.”

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