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Other ministries, airlines oppose Rs 8,000 charge on domestic flights

business Updated: Apr 29, 2016 11:08 IST
Tushar Srivastava
Tushar Srivastava
Hindustan Times
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The Rs 8,000 per landing on domestic flights has been proposed to fund regional connectivity.( Kalpak Pathak.Hindustan Times)

New Delhi: The aviation ministry’s proposal to charge Rs 8,000 per landing on domestic flights to fund regional connectivity has been opposed by other ministries as well as carriers, sources said.

To enhance regional connectivity, the aviation ministry had initially proposed a 2% cess on domestic flights (except the ones that fly to smaller cities) and international tickets in the National Civil Aviation Policy 2016, which is likely to be taken up by the Cabinet soon, towards creating a regional connectivity fund (RCF).

The ministry had proposed the RCF would be used to subsidise regional flights by capping fares at Rs 2,500 per hour of flying.

However, the note circulated by the ministry for inter-ministerial consultations, a fortnight before the policy goes for Cabinet’s approval, scrapped the plan to charge a 2% cess, and instead proposed levying Rs 8,000 per landing on domestic flights operated by planes with 80 or more seats. The move is likely to garner an estimated Rs 500 crore annually.

Sources said the proposal, which would result in a hike in fares as the airlines would pass on the additional charges on to the passengers, has been opposed by some ministries who have argued that there is no legal provision under which the government can levy such a charge on airlines.

“The objections have been sent to the aviation ministry,” a ministry official said.

Domestic carriers have also strongly opposed the propsed charge.

“The aviation ministry may still go ahead and push the proposal, but it is certain that it would be legally challenged. The government will need Parliament’s approval to impose this additional charge,” said a senior executive of a budget carrier, who did not wish to be named.

“Instead of reducing the exorbitant taxes on aviation turbine fuel, and other charges that make life so difficult for airlines, the government wants to levy new charges. The charges would be passed on by airlines to customers, but why should passengers flying between big cities fund regional travel?” questioned official of another airline.

Aviation turbine fuel (ATF) or jet fuel is the single-largest element contributing to airline costs and accounts for 45% of the operating cost of Indian carriers.