NEW DELHI: The Government today said its ambitious regional connectivity scheme UDAN, set to take wings tomorrow, will jump-start regional aviation even as it defended the imposition of levy on scheduled flights from trunk routes to fund the scheme.
The government had on July 1 unveiled the draft scheme which fixed all-inclusive fares at Rs 2,500 for one-hour flights in its attempt to make flying affordable for the common man.
The final guidelines under the regional connectivity scheme (RCS) which has been named as UDAN (Udey Desh ka Aam Nagrik) are set to be announced tomorrow by the Civil Aviation Minister Ashok Gajapathi Raju.
The scheme seeks to provide air services between unserved and under-served areas as well as extending viability gap funding (VGF) through a regional connectivity fund.
There are 394 unserved and 16 under-served airports.
“We are very hopeful of a positive response from the industry but our thinking is that with the scheme, we will in fact be jump-starting regional aviation,” Minister of State for Civil Aviation Jayant Sinha said on the sidelines of an aviation event here.
He exuded confidence that the scheme would be “quite attractive” for consumers, carriers, small and regional airlines, lessors and other players in the ecosystem.
He said the purpose of formulation of such a scheme is that regional carriers get the support they need both in terms of reducing their cost as well as in terms of viability gap funding so that they can serve tier-II and tier III cities.
Asked for his reaction to allegations of the Federation of Indian Airlines that the government did not have the “mandate” to impose a levy on scheduled flights, Sinha said the government had a “very extensive” stakeholder’s consultation process prior to the formalisation of the RCS.
“We have already clarified from the ministry. Based on our own discussions with the Law Ministry, we think we can look forward to this kind of arrangement (imposition of levy) within the current legislation,” he said.
Established airlines grouping Federation of Indian Airlines (FIA) has reportedly threatened to move court over the imposition of levy in nature of tax on air services, saying it does not have any authority or mandate to do so.
FIA consists of IndiGo, SpiceJet, Jet Airways and GoAir, which between them have more than 80 per cent market share.
Civil Aviation Secretary R N Choubey also said the government has full authority to impose a levy on air tickets.
“We have the mandate. We have the Law Ministry’s ruling and it is already being done. The passenger service fee is already being collected under the same rule and same norm,” Choubey said.
A slew of incentives are being proposed in the RCS. Airlines will be extended VGF while the states concerned are required to offer certain concessions such as providing police and fire services free of cost.
VGF will be created by way of charging a small levy per departure on all domestic flights on certain routes and small aircraft below 80 seats. Central and state governments will be sharing the VGF amount.
The government has already notified in August excise duty of 2 per cent for jet fuel purchased from airports that come under RCS, which is part of the new civil aviation policy. (AGENCIES)
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