Poor performance of regional airlines to be examined

Acknowledging that regional airlines have not succeeded so far in India, the Civil Aviation Ministry has decided to examine the reasons and the steps needed to be taken to promote regional connectivity.

Along with this, the Ministry would also examine ways to carry out restructuring of the Route Dispersal Guidelines (RDGs) which mandate Indian carriers to operate to socially- important but financially-unviable routes of the Northeast, Jammu and Kashmir and the Andaman and Nicobar Islands.

"It has been decided to conduct a study to examine why regional airlines are not successful in India and what needs to be done to promote regional air connectivity," official sources said.

To carry out this study, the Ministry has decided to appoint a consultancy firm to examine these issues in-depth and recommend measures to improve regional connectivity, they said, adding the outcome of the study could form the basis of a draft policy framework on the matter.

Besides restructuring RDGs, the Ministry was also contemplating asking airlines to buy smaller planes to operate flights to smaller cities with small runways.

However, industry sources say such a decision should be left to the commercial consideration of the airlines themselves and not imposed on them.

While massive plans are on the anvil to create new airports and upgrade existing ones in Tier-II and Tier-III cities in the 12th Plan period, the industry sources said regional connectivity has not been a success, despite the existence of an official policy for regional aviation.

Indian airports would require an estimated investment of a whopping Rs 67,500 crore during the 12th Plan period (2012- 2017), of which around Rs 50,000 crore is likely to be from the private sector.

The selected consultant would be asked to identify the factors inhibiting the growth of regional air connectivity in different parts of the country, including economic, commercial, technical, infrastructure, policy and regulatory constraints, the sources said.

Besides studying international best practices, it would have to lay down criteria with justification for selection of towns to promote regional air connectivity and identify small cities and towns, based on those criteria where there is adequate market potential for regional airlines to operate.

The consultant would also have to do a mapping of existing infrastructure of airports and air strips and analyse their adequacy, determine the appropriate aircraft size for providing regional connectivity and listing incentives like exemption from duties, taxes, charges, fees and other levies to promote such operations.

It would also be tasked to examine the feasibility of creation of a Regional Air Connectivity Fund and review the existing Route Dispersal Guidelines to provide a new framework to enhance connectivity to remote and inaccessible areas in the country.