Lok Sabha Question No. 2007 (UNSTARRED), answered on 2025-07-31
Subject: Viability Gap Funding
Ministry: CIVIL AVIATION
Asked by: Shri Y S Avinash Reddy

## GOVERNMENT OF INDIA MINISTRY OF CIVIL AVIATION Lok Sabha

UNSTARRED QUESTION NO. : 2007 ( TO BE ANSWERED ON THE  31st July 2025 )

## VIABILITY GAP FUNDING

2007.    SHRI Y S AVINASH REDDY Will the Minister of CIVIL AVIATION

be pleased to state:-

- (a)  whether  the  Government  has  taken  note  of  the  exorbitant  airfares being charged by the airlines;
- (b) if so, the details thereof;
- (c) whether the Government has any plans to cap these airfares to make air  travel  accessible  and  affordable  for  all  and  if  so,  the  details  thereof; and
- (d) the total amount paid to airlines under Viability Gap Funding (VGF) to compensate for low airfares, year and airline-wise?

## ANSWER

Minister  of  State  in  the  Ministry  of  CIVIL  AVIATION            (Shri Murlidhar Mohol)

- (a)  to  (c)  Airfares  are  not  subject  to  regulation  by  the  Government  and airlines  have  the  flexibility  to  determine  their  airfares  based  on  their operational needs, while adhering to Rule 135 of the Aircraft Rules, 1937. The pricing of airfares is subject to dynamic fluctuations influenced by the fundamental economic forces of supply and demand. Various determinants such  as  current seat occupancy,  fuel  costs, aircraft  capacity,  and competitive factors significantly impact airline ticket pricing.;

; To ease surge in air fare, Ministry remains vigilant and sensitize airlines to exercise  moderation/  self-  regulation,  measures  like  increase  in  the number of flights, reallocating capacity, etc. are adopted as done during

- Pandemic, festivals, Mahakumb and Pahalgam Incident.

; In  order  to  enhance  the  transparency  in  airfare,  DGCA  has  set-up  Tariff Monitoring Unit (TMU) that monitors airfares on selected 78 routes on a random basis by using airlines websites on monthly basis to ensure that the  airlines  do  not  charge  airfares  outside  the  range  declared  by  them, under the provision of sub-rule (2) of Rule 135 of the Aircraft Rules, 1937. This covers about 27% of the domestic traffic.; ; (d)  The  Regional  Connectivity  Scheme  (RCS)  -  Ude  Desh  ka  Aam  Nagrik (UDAN)  envisages  providing  connectivity  to  un-served  and  underserved airports of the country through revival of existing air strips and airports, which in turn also promotes tourism, increase employment opportunities and regional growth across the country.; ; 637 RCS  routes  connecting 92 unserved  and underserved  airports, including 15 heliports and 2 water aerodromes have been operationalized under the scheme.The airfare on the RCS seats on which VGF is provided to the Selected Airline Operators (SAOs) is for a 3-year tenure.; ; The total amount paid to airlines under Viability Gap Funding (VGF), year and airline-wise is placed at Annexure.;

******

| VGF Disbursed to Airlines (figures in Rs. Crore)   | VGF Disbursed to Airlines (figures in Rs. Crore)   | VGF Disbursed to Airlines (figures in Rs. Crore)   | VGF Disbursed to Airlines (figures in Rs. Crore)   | VGF Disbursed to Airlines (figures in Rs. Crore)   | VGF Disbursed to Airlines (figures in Rs. Crore)   | VGF Disbursed to Airlines (figures in Rs. Crore)   |
|----------------------------------------------------|----------------------------------------------------|----------------------------------------------------|----------------------------------------------------|----------------------------------------------------|----------------------------------------------------|----------------------------------------------------|
| Sl No.                                             |                                                    | 2022- 23                                           | 2023- 24                                           | 2024- 25                                           | 2025- 26                                           | Total                                              |
| 1.                                                 | ALLIANCE AIR                                       | 177.54                                             | 130.05                                             | 97.47                                              | 16.16                                              | 421.22                                             |
| 2.                                                 | AIR TAXI                                           | 0                                                  | 3.75                                               | 14.75                                              | 3.73                                               | 22.23                                              |
| 3.                                                 | BIG CHARTERS                                       | 86.63                                              | 64.52                                              | 54.26                                              | 13.95                                              | 219.36                                             |
| 4.                                                 | GHODAWAT                                           | 75.17                                              | 116.76                                             | 186.68                                             | 33.02                                              | 411.63                                             |
| 5.                                                 | GSEC MONARCH                                       | 5.94                                               | 16.83                                              | 23.46                                              | 4.04                                               | 50.27                                              |
| 6.                                                 | HERITAGE                                           | 12.78                                              | 15.22                                              | 26.19                                              | 3.91                                               | 58.1                                               |
| 7.                                                 | INDIGO                                             | 298.61                                             | 296.98                                             | 107.79                                             | 0                                                  | 703.38                                             |
| 8.                                                 | PAWAN HANS                                         | 25.5                                               | 32.52                                              | 21.21                                              | 5.03                                               | 84.26                                              |
| 9.                                                 | SPICEJET                                           | 116.17                                             | 129.99                                             | 26.89                                              | 18.71                                              | 291.76                                             |
| 10.                                                | Just Udo Aviation P. Ltd.                          | 0                                                  | 0.4                                                | 69.26                                              | 14.61                                              | 84.27                                              |
|                                                    | Total                                              | 798.34                                             | 807.02                                             | 627.96                                             | 113.16                                             | 2346.4 8                                           |

*Total VGF disbursed to airlines since 2017-18 is Rs. 4159.73 Crore. *****