Robin Hood tax on fliers to kick in on Dec 1
A levy of up to Rs 8,500 per flight to be imposed to subsidise airfares for aam aadmi flights to small cities
- Nov 12, 2016,
- Updated Nov 12, 2016 10:28 AM IST
Fliers will have to shell out more for airfares with the government going in for a levy of up to Rs 8,500 per flight on major routes from December 1 to finance its regional connectivity scheme that aims to make air travel more affordable for the masses.
The levy will be a lump sum charge on the entire flight which will be shared among the total number of passengers. The increase in the price of each ticket will, therefore, depend on the number of passengers on a particular flight.
The UDAN (Ude Desh ka Aam Naagrik) scheme has been floated to connect small cities by air as well as make flying more affordable for the common man with airfares being capped at Rs 2,500 for one-hour flights.
Civil Aviation Secretary R N Choubey on Friday said the levy will be Rs 7,500 for flights up to 1,000 kilometre distance, Rs 8,000 for a 1,000-1,500 kilometre flight and Rs 8,500 for flights above 1,500 kilometre.
It will be applicable only on scheduled domestic flights operating on major routes and excludes regional flights, he said. To provide viability gap funding for the flights operated under UDAN, the ministry will charge the levy from airlines on every departure on major air routes such as the Delhi, Mumbai, Chennai Hyderabad, Bengaluru and Kolkata. The government has created the Regional Connectivity Fund (RCF), of which 80 per cent will be financed by the Centre and the rest by respective states.
With the levy, the government estimates to have Rs 400 crore for RCF, Choubey said.
On top of it, another 20 per cent funding will come from state governments. "We are looking at roughly around Rs 500 crore per year available in the kitty," he said. Choubey was speaking at a stakeholders' conference and pre-bid meeting on implementation of UDAN.
The levy will push air fares slightly higher as airlines are expected to pass on the burden to flyers. However, Choubey said that even if the levy burden is passed on to the customers, the air fares will not go up significantly.
Stating that the levy will come into effect from December 1, 2016, Choubey said even if it is being passed on entirely by airlines without any quantum being absorbed by them the increase in airfares should not be more than, let's say, one per centof a ticket price.
"That is the ballpark figure.The average increase in fares will be one per cent and if the airlines decide to absorb a part of it, then the increase would be much less," Choubey added. However, airlines have already criticised the move for imposing the levy as it will make flying more expensive for their passengers.
Fliers will have to shell out more for airfares with the government going in for a levy of up to Rs 8,500 per flight on major routes from December 1 to finance its regional connectivity scheme that aims to make air travel more affordable for the masses.
The levy will be a lump sum charge on the entire flight which will be shared among the total number of passengers. The increase in the price of each ticket will, therefore, depend on the number of passengers on a particular flight.
The UDAN (Ude Desh ka Aam Naagrik) scheme has been floated to connect small cities by air as well as make flying more affordable for the common man with airfares being capped at Rs 2,500 for one-hour flights.
Civil Aviation Secretary R N Choubey on Friday said the levy will be Rs 7,500 for flights up to 1,000 kilometre distance, Rs 8,000 for a 1,000-1,500 kilometre flight and Rs 8,500 for flights above 1,500 kilometre.
It will be applicable only on scheduled domestic flights operating on major routes and excludes regional flights, he said. To provide viability gap funding for the flights operated under UDAN, the ministry will charge the levy from airlines on every departure on major air routes such as the Delhi, Mumbai, Chennai Hyderabad, Bengaluru and Kolkata. The government has created the Regional Connectivity Fund (RCF), of which 80 per cent will be financed by the Centre and the rest by respective states.
With the levy, the government estimates to have Rs 400 crore for RCF, Choubey said.
On top of it, another 20 per cent funding will come from state governments. "We are looking at roughly around Rs 500 crore per year available in the kitty," he said. Choubey was speaking at a stakeholders' conference and pre-bid meeting on implementation of UDAN.
The levy will push air fares slightly higher as airlines are expected to pass on the burden to flyers. However, Choubey said that even if the levy burden is passed on to the customers, the air fares will not go up significantly.
Stating that the levy will come into effect from December 1, 2016, Choubey said even if it is being passed on entirely by airlines without any quantum being absorbed by them the increase in airfares should not be more than, let's say, one per centof a ticket price.
"That is the ballpark figure.The average increase in fares will be one per cent and if the airlines decide to absorb a part of it, then the increase would be much less," Choubey added. However, airlines have already criticised the move for imposing the levy as it will make flying more expensive for their passengers.