Cap on airfare? All eyes on Cabinet meet on aviation policy today

June 15, 2016 08:47

The Union Cabinet is likely to take up the much-awaited Civil Aviation Policy at its meeting today, which may unveil a slew of passenger-friendly measures including capping of airfares at Rs 2,500 for an hour-long flight.

"The Union Cabinet is likely to take up the proposed aviation policy for its approval," official sources said.

The Civil Aviation Ministry had sent the proposed policy to Cabinet for approval on June 3. The NDA government had for the first time unveiled the policy draft in November 2014, subsequently replacing it with another draft in October 2015. Initially, the policy was expected to be finalised in the last financial year as certain proposals were to be implemented from April 1, 2016.

Since then, the government has been moving back and forth on the matter, primarily to strike a balance between various stakeholders on their glaring differences over issues like the 5/20 rule that allows a carrier to fly abroad only if it has 20 aircraft and has flown domestic for five years.

The policy aims to bolster the domestic aviation sector by tapping its high growth potential with provisions such as capping airfares at Rs 2,500 for a one-hour flight, auctioning of unilateral traffic rights, tax incentives for airlines, maintenance and repair works of aircraft besides mooting 2 per cent levy on all air tickets to fund regional connectivity scheme and providing viability gap funding for airlines to encourage operate on regional routes.

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