London: In a bid to encourage air connectivity to small towns, Civil Aviation Ministry is considering doing away with airport and navigation charges for airlines operating to such destinations while imposing a cess of about Rs 50 on all domestic flyers to realise the cost.
"We are planning to stop charging from airlines connecting small towns. Fees like airport charges, navigational charges and other such costs -- which is nine per cent of the total cost of any airliner -- will be waived and the Airports Authority of India (AAI) will bear it," Civil Aviation Minister Ajit Singh said.
To fund this, a cess of about Rs 50 will also be levied on all domestic flyers.
There are around 90 such Tier-II and Tier-III towns which have airports but have no air connectivity or very low air operations.
The Ministry will require an annual fund of Rs 400 crore for giving such subsidy to the airlines for flying to these otherwise commercially-unviable destinations.
"If the airlines receive such concession, they will be immensely benefited," Singh said.
Earlier, officials had said that the AAI, which owns most airports in the country, could seek from state governments free land for any airport expansion plan, tax exemption, water and power supply and proper road connectivity, to provide free services to the airlines.
If the state governments wanted to encourage air operations from these unused or scarcely used airports, they could provide these facilities to AAI to enable it encourage airlines to operate from there, they had said.
The Civil Aviation Minister said Rs 3,000 crore will be given to the Airports Authority of India to build airport infrastructure in small towns.
He said the funds will come from the revenue share from Delhi and Mumbai International Airports and government wants to spend the money in building airports and lowering charges for airlines to operate to non-viable and smaller destinations.
Singh said the Airports Authority of India will get concessions like waiver of municipal taxes etc and in later stage the Civil Aviaition Ministry may ask states to underwrite seats on these sectors.