Policy shift on anvil to promote air connectivity

Policy shift on anvil to promote air connectivity

Proposes to start Air Connectivity Fund as a long-term measure

Policy shift on anvil to promote air connectivity

 In a bid to promote air connectivity across the country, government has proposed a major shift in its route dispersal policy, promising airlines which fly to these regions exemption from various charges and other incentives.

Under the draft policy on regional and remote area air connectivity, the Civil Aviation Ministry has also proposed to allow conversion of regional airlines, which operate within a state, into scheduled national carriers.

The draft makes it mandatory for all scheduled airlines to deploy capacity on 87 identified regional destinations “which is at least equal to the capacity deployed on trunk routes” by October next year. These destinations include cities and towns in Andhra Pradesh, Jharkhand and Maharashtra.

Official sources said the draft has been circulated among all stakeholders, including airlines, charter and non- scheduled operators, asking them to submit their responses by September four. In order to promote air connectivity to various regions, especially the Northeast, Jammu and Kashmir and the islands of Andaman & Nicobar and Lakshadweep, which have remained unserved or were under-served, “it is necessary that new measures be taken to encourage airlines to introduce or increase flights to such airports,” the draft said.

The objective was to encourage airlines to fly to these areas where infrastructure has been developed “by offering concessions/incentives, making it obligatory to fly to certain areas or providing viability gap support for operations.”

Apart from this, the state governments would have to reduce VAT (value added tax) on fuel uplifted from a state, waive duty on electricity charges, municipal charges and underwrite a number of seats per airline.
It also proposes to establish an Air Connectivity Fund as a long-term measure to provide necessary financial support to promote air connectivity to remote and strategic areas.

The size of the fund, its tenure and mechanism to administer it would be decided and notified separately later, the sources said.