States, Airlines Seek Sops for Regional Connectivity Plan

Date: 30 July 2016 - 20:37

News ID: ۲۹۳۵۶

NEW DELHI (thehindu ) - State governments have asked the Centre to include long-distance flights in its regional connectivity scheme, even as airlines sought subsidies to be awarded for a longer period to make the plan a success.
The suggestions came at a national-level meeting on regional connectivity scheme organised by the Union Civil Aviation Ministry with airlines, airport operators, State governments and other stakeholders, here on Friday.
Three-year subsidy
As per the draft regional connectivity scheme, the government will provide subsidies to airlines for three years so that they offer Rs.2,500 as fares for an hour’s flight on limited seats on the regional routes.
"One of the important demands of the airlines was to get subsidy for a longer period. We feel route viability is established in two years. But we are examining all the suggestions with an open mind,” Civil Aviation Secretary R.N. Choubey said at a press conference.
He said "all the States had unanimously” supported the regional connectivity scheme. All the routes connecting underserved or unserved airports within 200-800 km distance can become a part of the scheme.
"However, we have received requests that this restriction be changed and approval be granted on a case-to-case basis,” Mr. Choubey said, explaining that in States such as Haryana, regional connectivity of airports would not be possible for a minimum 200-km distance. Under the scheme, the government will provide 80 per cent of the subsidy to airlines by charging a levy on each departure from airlines operating on metro routes, while the remaining 20 per cent will come from States. In the case of north-eastern States, the government will provide 90 per cent of the subsidy amount. "Some north eastern states requested us to provide full subsidy for the scheme,” Mr. Choubey said. He added that the States and airlines had agreed to a fare cap of Rs.2,500 for an hour’s flight on regional routes and States were willing to provide concessions on infrastructure.
"We need to make air travel affordable. There is tremendous demand for air travel. It will grow even faster when we provide airfares starting from Rs.2,500 which is a very attractive price point,” said Minister of State for Civil Aviation Jayant Sinha, "Business opportunity is very good here. We are working on the building blocks — airports, aircraft, pilots, security — to make travel possible.”
The airlines also demanded decreasing the bank guarantee of Rs.50 lakh proposed to be given by them to the Centre to fly on each regional route. "We feel the entry barriers are already low,” he said. The government will revive 60 airports initially – 50 State Government airstrips and 10 Airports Authority of India airstrips, the Civil Aviation Secretary said.