Government pushes regional air connectivity

Union tourism minister Mahesh Sharma and civil aviation minister Ashok Gajapathi Raju address the media in New Delhi. (Photo: PTI)

People living in very small towns and rural areas with airports/airstrips that are “unserved” (where no commercial flights operate) or “under-served” (where up to seven flights operate per week) can now hope to travel by air at a reasonable fare. This is an initiative of the Modi government, which, on Friday unveiled the draft copy of its Regional Connectivity Scheme (RCS) that will cap fares from a distance of 200 km to 500 km.

But the Government did not reveal how much of levy it plans to impose on airlines for domestic flight departures on major routes to fund the RCS, saying this would be revealed very soon as a separate rule. The airlines are expected to pass on the amount to passengers who will probably end up paying a marginal amount extra while flying between metros or other major routes.

The RCS will be applicable for routes between a a served airport and an unserved or under-served one at distances from 200 km to 800 km. The much-publicised cap of Rs 2,500 per seat will be for a distance of 500 km. For a distance of 201 to 225 km, the cap will be Rs 1,770. For a distance of 300 km, the fare will be capped at Rs 1, 950. For a distance of 600 km, the capped fare will be Rs 3,020, while for 800 km, it will be Rs 4,070.

“The selected airlines on their part will be expected to commit 50 per cent of the seats on RCS flights to be sold at the specified airfare cap,” the government said on Friday. The civil aviation ministry on Friday released a separate draft list of the Viability Gap Funding (VGF), mentioning the VGF caps per seat. The airline operators will bid for “exclusive” rights if they are the lowest bidder (L1) through a reverse bid process on each route.

A minimum of three, and a maximum of seven flights per week per route with a minimum of nine and maximum 40 seats per flight will be allowed under the RCS.

The government said that the VGF would be reduced if the passenger load factor remained high and would be discontinued after three years when routes become self-sustainable. The airlines, interested in participating in RCS, would have to provide a bank guarantee of Rs 50 lakh per route and will get exclusive rights to fly on the route.

Some of the unserved airports include Bobbili, Donakonda and Ellore in Andhra Pradesh, and Bellary, Bidar, Hassan and Kolar in Karnataka.

The draft will now be circulated to stakeholders, including states, for their opinion they will be given three to respond. According to news agency reports, as part of the proposed scheme, a new category of airlines, scheduled commuter airlines, is being created where a new operator may be allowed to start operations with just one plane.

Union civil aviation minister Ashok Gajapathi Raju, who unveiled the draft policy, said RCF would be created for funding RCS “through a levy on certain flights”. The ministry would contribute 80 per cent of the VGF, while the respective state governments would chip in with the remaining 20 per cent to the fund which will have a corpus of Rs 500 crore each year.

When asked how much levy was likely to be charged, civil aviation secretary R.N. Choubey said, “We are giving final touches to that aspect (levy amount), and it will be announced very soon.”

“The states are interested in connectivity ... Their feedback will also be taken into account. The central government cannot bypass the states. We will take them into confidence and work along with them to make this (RCS) happen,” Raju said.

“There are 31 airports inactive as of now. So, inactive airports will become low-hanging fruit in different states,” said Raju. There are 394 unserved and 16 under-served airports in the country. “The scheme is demand driven. Wherever the state governments and airlines come forward to make them functional, we would be very happy to revive those airports,” Mr Choubey said. He added that there were about 30 such airports which could, in no time at all, be used for operations without incurring any extra cost on their revival.