Connectivity levy on airlines hiked

The Union government on Thursday announced that regional air connectivity levy charged from commercial airlines under the UDAN scheme will be increased to ₹10,000 per departure from January 1, a move aviation experts said could push airfares marginally higher. 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. “The central government has decided to revise the existing rate of levy on scheduled flights being operated within India to fund the Regional Air Connectivity Fund, till further revision,” the ministry said in an order on Thursday. Currently, the levy is ₹5,000 per departure and the amount will further go up to ₹10,000 per departure from January 1 to March 31, 2023 and further increase to ₹15,000 from April 2023 till April 2027, it stated. Aviation experts said the civil aviation ministry’s order, which does not put any rider for airlines, is likely to increase load on passengers.

The government on Thursday announced that regional air connectivity levy charged from commercial airlines under the UDAN scheme will be increased to ₹10,000 per departure from January 1, a move aviation experts said could push airfares marginally higher.

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

“... in order to take forward the operations under the ongoing and upcoming RCS-UDAN scheme, the levy to fund the regional air connectivity (RCF) fund has been reviewed and revised by the Centre,” the ministry said in an order issued to airlines and airports on Thursday.

“The government has decided to revise the existing rate of levy on scheduled flights being operated within India to fund the Regional Air Connectivity Fund...”

Currently, the levy is ₹5,000 per departure and the amount will further go up to ₹10,000 per departure from January 1 to

March 31, 2023 and further increase to ₹15,000 from April 2023 till April 2027, it stated.

Experts said the order, which does not put any rider for airlines, will increase load on passengers.

“With this circular, the government wants to upscale UDAN operations for which funds are required to give subsidy to RCAS operators,” said aviation expert Vipul Saxena. “This move may increase load on passengers as the airlines will increase airfares (already on the higher side), as there are no riders for airlines not to add this to fares.”