Several regional airports in India lie deserted in want of travellers and affordable ticket prices. (Reuters photo)
Highlights
- Centre to fund revival of regional airports, share costs with states
- Airfares planned to be capped at Rs 2,500 per hour of flight time
- Airline operators to be compensated through fund by Centre and states
Last month, operations came to a grinding halt at the Durgapur airport in West Bengal after leading to a bitter face-off between the Centre and the state government. Air India, the only airline which operated to it, had discontinued flights saying nobody was buying tickets.
Durgapur was just the latest in a long list of unused airports and airstrips across the country - a total of 394 in all.
The government now hopes to change this with its new regional connectivity plan.
Under this scheme funded by a Regional Connectivity Fund (RCF), where states are to contribute 20 per cent and the Centre 80 per cent, fares will be capped at Rs 2,500 for one hour of flying time.
"Thirty-five crore middle class families will be connected in the future with this scheme," said Minister of State for Civil Aviation, Dr Mahesh Sharma.
The Centre will give concessions on excise duty on value-added tax, service tax, even encouraging code sharing.
The airline operator will have to fly a minimum of three and maximum of seven flights per week for which they will be compensated through a viability gap fund or VGF.
The government is hopeful the concessions and sops will get state governments and airline operators to back the scheme.
Union Civil Aviation Minister Ashok Gajapati Raju said, "We are ready to do hand-holding for some time, but our aim is to make these routes economically viable."
Dhiraj Mathur, Partner, Aerospace and Defence at consultancy PwC said, "The scheme will enable those airports which have been developed but no flights are taking place to start commercial operations."
"I believe part of the challenge of this scheme will be to get the government to sign up and fulfil their commitment and obligation towards the scheme," he said.
Stakeholders have three weeks to give the government feedback and suggestions before the policy is finalised and can write in till July 22 through the ministry portal or via e-mail.