Hike in Regional Connectivity Scheme levy to push airfares up


Come April, a component of your air fare that helps the government fund its regional connectivity (or UDAN) scheme (RCS), will triple.

According to a government order issued on October 21, the airlines will have to pay a RCS levy per departure of ₹10,000 instead of the current ₹5,000 from January 1, 2023 to March 31, 2023. This will be further revised to ₹15,000 from April 1, 2023 to April 30, 2027. This is the first hike in the levy.

The airlines would in turn, charge passengers an amount of ₹50 as a part of the total air fare, along with the other fare components that included the user development fee (UDF) and the passenger service fee, which would be paid to the airport and the CISF.

The RCS levy is used to help the government provide a subsidy to those carriers that connect tier-2 and tier-3 cities, and offer 50% of the seats at discounted rates, under the government’s scheme.

A government official said that the move was necessitated because the number of routes under the RCS were increasing, and the scheme was a self-financing one without any allocation from the government towards the subsidy amount.


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