Airlines connecting small towns and cities will be given sops like free airport use, cheaper fuel and only 1.2 per cent service tax to operate flights. (File Photo)
Union Tourism Minister Mahesh Sharma is all set to ask state governments to identify popular tourist places in their states, especially pilgrim centres, that do not yet have air connectivity but have built airstrips.
"I will be writing to the state governments to join our scheme. From the Ajmer dargah that is part of our prasad scheme to Deogarh, there are so many places. If they join, it will be a big boost to tourism," Mr Sharma, who is also the junior minister for aviation, told NDTV.
Ajmer in Rajasthan and Deogarh in Jharkhand are both popular pilgrim centres that have existing airstrips but no airline operates at these places. There are nearly 350 such built up airstrips that the government wants to develop into low cost airports, 100 in the next few years.
The aim is also to promote the new civil aviation policy that places a premium on regional connectivity.
Airlines connecting small towns and cities will be given sops like free airport use, cheaper fuel and only 1.2 per cent service tax to operate flights.
The catch is that fares can't exceed Rs 2,500 for an hour long flight. If the cost exceeds this amount, the government will compensate the airline by paying the difference. Money from this will come from a cess that airlines operating on profitable routes will be asked to pay. In other words, subsidize the losses.
But will capping airfares enthuse airlines to invest in these new routes? Government sources argue that regional airlines in south India that fly to cities like Tirupati, Vijayawada already offer fares in the range of Rs 2500 for 40-min flights.
"An industrialist came to me and said that if airports offer fiscal concessions, we wouldn't even need subsidies," said civil aviation secretary Rajeev Nayan Choubey.
With questions being raised whether airlines will show interest if fares are capped, government first wants to identify routes like pilgrim towns where passenger traffic will be assured and airlines are encouraged to start operations.