Plan to levy 2% cess on airfares against global norms: IATA


The government’s plan to charge 2% cess on domestic and international airfares goes against the principles of the International Civil Aviation Organisation (ICAO), global trade organisation International Air Transport Association (IATA) has said.

The association, in its reply to the government’s draft civil aviation policy announced in October, opposed the plan to levy cess, among other proposals, said Tony Tyler, director general and CEO of IATA, which has 230 airlines across the world as its members.

“ICAO says cost and charges to the airlines should only be cost related and when the government charges here (airlines) to provide something there (regional connectivity), it goes against the ICAO principles,” said Tyler.

In the draft policy, the government announced an ambitious plan to provide regional connectivity between smaller cities in the country at Rs 2,500 per passenger per hour of air travel. It plans to subsidise regional connectivity through a viability gap funding that is to be generated through a 2% cess on airfares.

To achieve the targeted Rs 2,500 fare, the government also plans to provide benefits such as no excise on fuel for regional flights and exemption from service tax, and landing and parking charges.


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