The ministry's new policy also aims to improve regional connectivity. In addition to the cap of Rs 2,500 on hour-long regional flights, 30-minute flights will cost no more than Rs 1,200. Minister of State for Civil Aviation Mahesh Sharma had first mentioned the proposal in the Lok Sabha on May 3. The new policy also proposes that the Centre will refund 80% of the losses airlines may incur because of the fare caps.
Apart from Mumbai-Delhi flights, the Cabinet has shot down the proposed 2 per cent cess on all regional flights. The cess was proposed for the improvement of regional infrastructure.
The policy also scraps the 5/20 rule, which allows a carrier to fly abroad only if it has 20 aircraft and has flown domestic routes for five years. It will be replaced by the new 0/20 rule. This means, a new airline that has a fleet of 20 aircraft can start flying abroad.
Other proposed changes include auctioning of unilateral traffic rights, tax incentives for airlines and the maintenance and repair of aircraft. The NDA government had unveiled the policy draft for the first time in November 2014. It came up with a revised draft in October 2015.
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