Aviation Ministry refutes reports of new UDAN levy on airlines

After the official launch of UDAN scheme last month by the Aviation Minister Ashok Gajapathi Raju, the government has taken its first step towards the implementation of UDAN (Ude Desh Ka Aam Nagrik), a plan that aims to making flying affordable for masses. However, the move is not expected to go down well with the existing flyers.

According to news reports, the government plans to impose a levy of Rs 7,500-Rs 8,500 on departure of every flight by scheduled carriers on major routes such as Delhi, Mumbai, Chennai, Hyderabad, Bengaluru and Kolkata. The levy will go into regional connectivity fund (RCF) that will provide corpus to the regional connectivity scheme. The state governments will contribute about 20 per cent to RCF. When combined, the government is looking at building around Rs 500 crore corpus each year.

When Business Today contacted an official in aviation ministry, he said that civil aviation secretary R.N. Choubey has been misquoted. "It's a big decision. Such decisions have to be consulted with the finance ministry," the official said.

Under UDAN, the airfare would vary from Rs 1,420 to Rs 3,500 for fixed-wing aircraft, depending on the distance covered. It will boost flying in regional centres as airfares will become affordable for a vast majority of middle class Indians. The intent of the government is to fly 300 million domestic passengers by 2022 from 85 million in 2015/16.