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The Ministry of Civil Aviation (MoCA) will increase the levy charged from airlines flying major routes in order to fund the country’s ambitious regional connectivity programme UDAN.
Those in the know said the new levy will be ₹10,000 for every departure beginning January 1, 2023, and up to March 31, 2023. From April 1, 2023, to April 30, 2027, the levy will be ₹15,000 per departure.
The current levy, ₹5,000 per departure, was introduced in June 2017. Airlines reportedly included a charge of around ₹50 in every ticket as part of the Regional Connectivity Scheme (RCS) levy.
This would mean, effective January 1, the levy would be doubled; and, subsequently, trebled next fiscal onwards.
It may be recalled that the Ministry had introduced a levy beginning December 2017, primarily towards the Viability Gap Fund (VGF) for participating carriers. The VGF was shared between the Centre and the states concerned.
“The levy will be towards viability gap funding, especially with new routes opening up,” a ministry official said, adding that UDAN is a self-financing scheme.
Currently, 425 routes are operational and 575 routes are ‘on track for implementation’ within the next five-odd years. Another significant boost in UDAN has been towards developing airport infrastructure, with 68 of the targeted 100 airports operationalised.
Under the UDAN scheme, airlines will bid for identified air routes. The bidder seeking the lowest subsidy is allowed to operate flights on the selected route. The airline(s) then provide half the seats on each flight (minimum nine and maximum 40 seats) at the subsidised rate of ₹2,500, where the remainder of the fare is compensated by the government through VGF.
Over one crore passengers have reportedly benefited from the scheme.
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