Cabinet clears new civil aviation policy; airfares capped at Rs 2,500 for 1-hour flights

New Delhi: The Union Cabinet on Wednesday cleared the much-awaited Civil Aviation Policy thereby unveiling a slew of passenger-friendly measures including capping of airfares at Rs 2,500 for an hour-long flight.
As per sources, under the new policy there will also be a cap of  Rs 1,200 for a 30-minute flight. Sources further added that the cabinet has abolished the 5/20 rule and replaced it with 0/20. This implies that airline companies will now be able to fly overseas with only twenty aircrafts without being in operation for a minimim of five years.
The policy aims to bolster the domestic aviation sector by tapping its high growth potential with provisions such as capping airfares at Rs 2,500 for a one-hour flight, auctioning of unilateral traffic rights, tax incentives for airlines, maintenance and repair works of aircraft besides mooting 2 percent levy on all air tickets to fund regional connectivity scheme and providing viability gap funding for airlines to encourage operate on regional routes.
The Civil Aviation Ministry had sent the proposed policy to Cabinet for approval on June 3.
The NDA government had for the first time unveiled the policy draft in November 2014, subsequently replacing it with another draft in October 2015.
Initially, the policy was expected to be finalised in the last financial year as certain proposals were to be implemented from April 1, 2016.