Govt plans 2% levy on air tickets for fund to improve access to remote areas

Draft aviation policy proposes incentives to cut cost of flying; levy to help raise Rs.1,500 crore a year, compensate airlines for losses on flights to cities that have little or no air connectivity

The government has proposed a 2% levy on domestic and international plane tickets to subsidize airlines so that they connect small and remote cities, and enable millions more to travel by air in the world’s fastest growing aviation market.

A draft aviation policy unveiled on Friday said the levy, which would be imposed with effect from 1 April 2016, would help raise Rs.1,500 crore a year. The proceeds will help compensate airlines for losses on flights to cities that have little or no air connectivity.

HT Mint, New Delhi, 31st Oct. 2015

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