NEW DELHI, India (Reuters) --The Indian government cut landing charges at airports and navigation fees for smaller planes in a bid to make air travel more affordable and to encourage connections to small cities.
The government said in a statement it had cut landing charges by 15 percent for domestic flights only if airlines make these payments within 15 days, while aircraft with a capacity below 80 seats will be exempt from landing charges.
Planes weighing up to 10,000 kg (10 tons) will pay navigation charges at 20 percent of current rates and those between 10,000 to 20,000 kgs. would be charged at 40 percent of current rates, it added.
The revised rates come into effect immediately.
"The above measures will bring down operating costs of scheduled domestic airlines, thereby making their operation more viable," the statement said.
India's top two domestic carriers, state-run Indian Airlines Ltd and privately-held Jet Airways have reported losses in the past fiscal year, hurt by flat demand, high government levies on operations and steep taxes on aviation fuel.
The stiff taxes imposed by cash-strapped federal and state governments makes air travel expensive in India, the world's 12th largest economy, and forces most travelers to use the subsidized and cheaper rail network.
More than a decade into India's economic liberalization program, the aviation industry has been largely untouched by changes that have spurred investment and improved services in several sectors such as telecommunications.
An Indian Airlines spokesman told Reuters landing charges accounted for three percent of its operating costs and a 15 percent cut would reduce operating cost by a marginal 0.5 percent.
He said its fleet, mostly made up of Airbus A300s, A320s and Boeing 737 planes, weighed upwards of 57,000 kgs. and would not qualify for an exemption from navigation charges announced on Thursday.
But benefits are expected to be larger for Jet and Air Sahara, which have a larger share of small planes in their fleet.
India's ruling coalition government, that heads for national elections in April-May, is attempting to reduce the cost of air travel and introduce a liberal aviation industry policy.
Last month, it scrapped an inland and foreign air travel tax and halved excise duty on aviation fuel to eight percent. The cuts helped reduce ticket prices by nearly 15 percent.
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