Govt to increase levy for regional air connectivity scheme

The government will increase the regional air connectivity levy charged from airlines operating on major routes to Rs 10,000 per departure from January 1, a move that could push the airfares higher.

Currently, the levy is Rs 5,000 per departure and the amount will further go up to Rs 15,000 from April 1 next year, according to a notification.

To fund the regional air connectivity scheme -- UDAN (Ude Desh ka Aam Naagrik) -- the civil aviation ministry has been collecting the levy from December 2016.

As many as 451 UDAN routes were operational till November 1 this year and more such routes are expected to be added in the coming months.

An airline industry official said the fares could rise by up to Rs 50 per person once the higher levy comes into force.

As per the notification issued last month, the central government has decided to revise the levy and accordingly, the amount will be Rs 10,000 per departure from January 1 to March 31, 2023.

From April 1, 2023 to April 30, 2027, the levy will be higher at Rs 15,000 per departure.

Since at least half of the seats in UDAN flights are offered at subsidised fares, the participating carriers are provided a Viability Gap Funding (VGF). The levy is collected towards the VGF, which is shared between the Centre and the states concerned.