Now, your Air India tickets will fund govt's cheap-travel scheme

Moneycontrol Bureau
Air India tickets on most domestic routes are now a little more expensive as the national carrier has begun charging its passengers a fee of Rs 70 to fund the government’s Regional Connectivity Scheme (RCS), according to a report in Business Line.

The report said Air India had started charging the levy on January 16. It is the first airline in the country to impose the fee since the scheme was launched last October.

The North-East region, Jammu & Kashmir, Andaman & Nicobar Islands, and Lakshadweep routes are exempt from the fee.

The money collected will be deposited in an escrow account run by the state-run airport developer Airports Authority of India. The funds will be used for subsidising flights to the un-served and under-served regions of the country and reviving existing air-strips and airports.

The Union government is imposing a levy of Rs 7,500 per flight between cities which are up to 1,000 km apart. For distances of 1,000-1,500 km, the levy will be Rs 8,000 per flight, and for above 1,500 km, Rs 8,500 per flight. The levy is based on the total seats in the aircraft and not the number of seats that an airline manages to fill.

Under UDAN, regional connectivity will be developed on market-based mechanism under which airlines will bid for seat subsidies. Airline operators will bid for up to 40 subsidised seats and minimum seats will be 9. There will be 50% seats on market based pricing. The scheme aims to ensure affordability, connectivity, growth and development, apart from increasing ticketing volume from 80 million to 300 million by 2022.