The civil aviation ministry is considering a proposal to levy about `40 to `50 as an air-travel cess on every passenger catching a flight anywhere in the country in order to subsidise flight operations of airlines to smaller towns.
The ministry is considering a proposal to establish an area essential services fund (AESF) and money for the fund to the tune of about `400 crores could be raised through such a levy on passengers in order to boost regional connectivity to smaller towns. A meeting was held in the ministry on Tuesday on the matter. Civil aviation minister Ajit Singh is understood to have expressed some concerns over any move to impose a levy on passengers, but well-placed ministry sources said there may be no other option but to impose such a levy. Air-fares therefore may go up further marginally.
Incidentally, the ministry is also considering another proposal to levy about `5 per passenger for another cess after proposed creation of a Civil Aviation Authority (CAA) that will replace current aviation regulator DGCA.
Sources said that at Tuesday’s meeting on the issue of proposed creation of an AESF, there was a discussion on whether the fund can be created by lowering airport charges alone. But it was felt by some that this would not be enough to create an AESF and that some sort of levy on passengers may have to be imposed to create an AESF. “Discussions will continue and there was no final decision reached at Tuesday’s meeting,” said a source.
The ministry is hoping that about 90 smaller towns will be firmly on the radar of air-connectivity once a subsidy is given to airlines who operate on loss-making routes to smaller towns. “A levy of about `40 to 50 on every passenger — catching a flight from anywhere in the country — seems reasonable for creation of an AESF and this may raise at least about `400 crores for the AESF. This is for a good cause,” said a ministry source.