NEW DELHI: Domestic airlines will soon be able to fly to remote areas of their choice, that too, with financial help and freebies from the government, as the civil aviation ministry has decided to do away with an archaic policy mandating the carriers to fly to certain far-flung regions.
The new policy, which will be submitted to the aviation ministry on February 15, lays down setting up of a Rs 350-400-crore fund to aid airlines that choose to connect remote regions of the country for the first three years. It is envisaged to get Cabinet clearance for it by April-end.
The old Route Dispersal Guidelines (RDG) categorised the seven metro cities (that have most traffic) in Category I, the northeast and the islands in Category II, whereas all other small cities were put in Category III.
It is mandatory for airlines to deploy 50 per cent of their Category I (metro) capacity to be used on Category III routes (small towns) and 10 per cent on Category II routes (north-east, Lakshadweep and Andamans).
"Today's Route Dispersal Guidelines (RDG) have the inherent flaw of forcing something down someone's throat. Now, airlines will decide where they want to go. Routes will be put up for bidding and the airline requiring the least financial assistance would win it," a senior official in the civil aviation ministry told ET.
The government has earmarked 40 Tier II and III towns, which have airport infrastructure ready to commence air connectivity upfront, while another 40 towns, where connectivity could begin in the near future have also been identified, the official added.
Meanwhile, state governments have agreed to underwrite some percentage of the flown seats in order to enable air connectivity.
"The government will also ask states to provide water and power to airport free of cost in order to promote regional connectivity," the official added.
Apart from these, there are additional discounts for promoting regional connectivity, which will also apply. For example, there are no airport charges for 70-80 seater (up to 40 tonne) aircraft. The Airports Authority of India (AAI) is also ready to scrap navigation charges under this new scheme to promote regional connectivity. The cost to upgrade the latter 40 airports will also be met by the AAI.
Experts call this new policy a win-win for all as there is no obligation on airlines. AAI will generate revenues from currently unused facilities and consumers will be better connected with more choice.
"It seems to be an effective mechanism for ensuring connectivity as there is motivation in terms of subsidy and other benefits. It sounds like the Universal Service Obligation fund like in telecom where a part of operators' revenue goes for subsidising remote-area connectivity," Mritunjay Kapur, country MD at Protiviti Consulting, said. http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/domestic-airlines-may-now-get-to-choose-remote-routes/articleshow/18492088.cms
The new policy, which will be submitted to the aviation ministry on February 15, lays down setting up of a Rs 350-400-crore fund to aid airlines that choose to connect remote regions of the country for the first three years. It is envisaged to get Cabinet clearance for it by April-end.
The old Route Dispersal Guidelines (RDG) categorised the seven metro cities (that have most traffic) in Category I, the northeast and the islands in Category II, whereas all other small cities were put in Category III.
It is mandatory for airlines to deploy 50 per cent of their Category I (metro) capacity to be used on Category III routes (small towns) and 10 per cent on Category II routes (north-east, Lakshadweep and Andamans).
"Today's Route Dispersal Guidelines (RDG) have the inherent flaw of forcing something down someone's throat. Now, airlines will decide where they want to go. Routes will be put up for bidding and the airline requiring the least financial assistance would win it," a senior official in the civil aviation ministry told ET.
The government has earmarked 40 Tier II and III towns, which have airport infrastructure ready to commence air connectivity upfront, while another 40 towns, where connectivity could begin in the near future have also been identified, the official added.
Meanwhile, state governments have agreed to underwrite some percentage of the flown seats in order to enable air connectivity.
"The government will also ask states to provide water and power to airport free of cost in order to promote regional connectivity," the official added.
Apart from these, there are additional discounts for promoting regional connectivity, which will also apply. For example, there are no airport charges for 70-80 seater (up to 40 tonne) aircraft. The Airports Authority of India (AAI) is also ready to scrap navigation charges under this new scheme to promote regional connectivity. The cost to upgrade the latter 40 airports will also be met by the AAI.
Experts call this new policy a win-win for all as there is no obligation on airlines. AAI will generate revenues from currently unused facilities and consumers will be better connected with more choice.
"It seems to be an effective mechanism for ensuring connectivity as there is motivation in terms of subsidy and other benefits. It sounds like the Universal Service Obligation fund like in telecom where a part of operators' revenue goes for subsidising remote-area connectivity," Mritunjay Kapur, country MD at Protiviti Consulting, said. http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/domestic-airlines-may-now-get-to-choose-remote-routes/articleshow/18492088.cms
No comments:
Post a Comment