Aviation

Govt mulls 2% cess on airfare

DELHI

The government is planning to impose a cess of 2 per cent on air tickets in the new civil aviation policy.

The money will be utilised for viability gap funding of domestic carriers operating flights to regional and remote areas, such as the Northeast, said sources, reports The Telegraph.

Analysts said the move could push up ticket prices.

A viability gap funding means the government meets a portion of a project cost to attract private investment. Such funding is usually needed to support projects that are socially significant but fall short of financial viability.

Under the proposed aviation policy, the government is looking to enhance connectivity to regional and remote areas.

The money garnered through cess will be used to provide funds to airlines to encourage them to fly on these unviable routes.

The government is also weighing options to tweak international flying norms for domestic airlines.

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