No more ‘dhamaka’ sale on air fares; tickets likely to cost more from Jan 2016


New Delhi: Domestic and international flyers out of metros or tier 1 cities may have to pay more for flight tickets from January 2016.

If the proposal of 2 percent levy on flight tickets in the draft National Aviation Policy for boosting regional air connectivity comes into effect, the flyers out of metros will have to pay more.

As a boost to measure regional air connectivity, the draft National Aviation Policy has proposed to generate around Rs 1,500 crore per annum to set up Regional Connectivity Fund and create viability gap funding to subsidise  airlines, who will have to cap fares at about Rs 2,500 per flying hour between non-metro destinations from April 1, 2016.

The revised national civil aviation policy is scheduled to be sent for Cabinet nod by the end of 2015.

The industry stakeholders like SpiceJet and IndiGo feel that fares will increase only if the 2 percent levy is considered in isolation. If the money collected from cess is invested back in the airport infrastructure like air traffic management and ground handling, and the regional connectivity improves, the overall cost is likely to come down, which will reflect in the fares.

As a result of the ongoing festive season GoAir, Air India, SpiceJet, Vistara, and others are raining discounts and promotional offers resulting in a fare war to entice people and increase their passenger traffic.

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