A fare cap of Rs 2,500 for hour-long flights and Rs 1,200 for 30-minute flights are part of the new Civil Aviation Policy approved by the Union Cabinet on Wednesday.
Other proposed changes include auctioning of unilateral traffic rights, tax incentives for airlines, maintenance and repair works of aircraft besides mooting 2% levy on all air tickets to fund regional connectivity scheme and providing viability gap funding for airlines to encourage operate on regional routes.
Amid concerns over an earlier proposal to auction additional bilateral rights, the government has now decided that a final call on additional rights would be taken by a committee headed by the Cabinet Secretary.
Besides, the Civil Aviation Ministry will come out with initiatives to develop new airports, separate regulations for helicopters and measures to boost skill development in the aviation sector. Airlines will also get tax incentives for operating on unserved routes.
The new policy was approved by the Cabinet and the much talked out regional air connectivity scheme is expected to be operational in the current quarter ending September. "The aim is to ensure affordable, convenient and cheap flying" for the people, Civil Aviation Secretary R N Choubey said.
There has been a high decibel debate over the continuance of 5/20 norm--whereby only local airlines having at least five years of operational experience and a fleet of minimum 20 aircraft are allowed to fly overseas.
About the decision to scrap the rule, Union minister Ravi Shankar Prasad said, "A questionable legacy has been thrown into the dustbin." The 5/20 rule was introduced during the UPA regime.
With regard to charging extra from passengers towards regional connectivity fund, Choubey said, "It will be a very, very small levy".
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