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Move after the North
Eastern Council failed to make viability payments to the carrier
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With Alliance Air, subsidiary of Air India, withdrawing its
flights from seven Northeast airports, including those in Tezpur, Lilabari and
Shillong, following non-payment of funds by the North Eastern Council (NEC) from January 1, plans are now to
redeploy the 60-seater ATR turboprops on profitable routes. However, Alliance
Air will be operating from Guhawati, Silchar and Imphal.
The NEC finances Alliance Air’s operations
each year through viability gap funding (VGF) of Rs 50 crore to 60 crore, in
line with a memorandum of understanding between the two .
Confirming the
development, the civil aviation minister, Ajit Singh, said, “As the NEC has refused to fund this
amount in the future, Air India has decided to withdraw its flights from the
Northeast.” While Alliance Air filed its VGF estimates in September last year
for the grant of Rs 52 crore and Rs 55 crore for 2012 and 2013, respectively,
the amount has not been paid to it, sources said.
The airline had been operating on the
assumption the funds would soon be made available
According to the route dispersal guidelines
of the ministry of civil aviation, an airline is required to ply 10 per cent of
its total capacity to the Northeast, J&K and Lakshadweep.
However, Air India is the only domestic
carrier deploying 20-22 per cent of its capacity to the region. Even after the
withdrawal of flights, Air India would still be plying 17-18 per cent of its
capacity on these non-viable routes, much above the limit of the policy
requirement, according to an official.
NEC intends to attract private carriers at
a cheaper subsidy. It had concerns on Air India’s rising fares and punctuality
of flights, said the official.
Air India has made clear to NEC it would be
needing four-five months to resume operations in case it was asked to do so.
Private carriers do not fly to the interior
of Northeast. It could not be confirmed from the ministry if any private
carrier had shown interest in plying on these routes.
The ministry is working on the regional
connectivity of Tier-III and -IV cities. It has also opened an Essential Air
Safety Fund to plug the losses of airlines plying on non-viable routes.
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