Besides these, it will also offer concessions on other services and tax relief on aviation turbine fuel (ATF) at underserved and unserved airports
We could see around 43 airports that currently do not operate any scheduled commercial flight become operational by February-end or early March as the Ministry of Civil Aviation and Airports Authority of India (AAI) race to award bids to airlines under regional connectivity scheme (RCS) or Ude Desh Ka Aam Naagrik (Udan) programme by February 3.
Minister of state for civil aviation Jayant Sinha told reporters that bids invited for the scheme, which aims to boost regional connectivity by providing incentives and subsidies through viable gap funding (VGF), had received 43 initial proposals from 11 bidders for 190 RCS routes. These bids will now be put up for counterbids.
Of the 190 routes, there are bids for six routes that do not require any VGF.
The scheme that would be funded through the regional connectivity fund (RCF) created from levy of Rs 7,500 and Rs 8,500 charged to the airlines on a per-flight basis could see unserved airports like Jaisalmer, Bikaner, Jalgaon, Akola, Kunj Vihar and others being connected through scheduled flights.
To make it commercially viable for airlines to operate flights to these airports at fares capped at Rs 2,500 for one-hour flight, the government has committed to cover any shortfall in operational cost through VGF and has also offered a three-year exclusivity to airlines on the RCS routes.
Besides these, it will also offer concessions on other services and tax relief on aviation turbine fuel (ATF) at underserved and unserved airports.
And despite a case in the Delhi High Court by airlines challenging the government move to fund the RCF through a charge imposed on them, Sinha said he was confident of getting the airlines to his side.
And if that does not happen, then he has other contingency options in place to jumpstart the scheme.
"As far as funding for Udan is concerned, there are efficient ways of funding it. The proposal we have in front of levy to the airlines is the most efficient and least-cost way of funding, but if that poses challenges, then we have other mechanism too that we can use," said the minister.
He said that his ministry, along with AAI, was behind Udan and subsidies. "Those airlines that will be participating in Udan can be sure that they will get the subsidies (VGF)".
During a press briefing, he said 15 states had already inked Memorandum of Understanding with the ministry for partnering in the RCS and another three will soon come on board.
Sinha said 35 unserved airports were ready to operate commercial schedule flights as soon as operators were ready with all regulatory clearances.
The government is looking to create a RCF of Rs 500 crore for VGF of 12 months and any shortfall would be met by AAI, which would be later recovered through a levy.
Sudhir Raheja, member (planning) of AAI, expects airlines to come around on the RCF issue.
"I don't why they have decided to contest in the court after they already had a brainstorm. I think they will eventually come on board. Otherwise, we have do have a contingency plan B. It (RCS) will take off. If the airlines are ready then we will step backwards to roll out the scheme," he said.
Raheja said the minister had advised the Directorate General of Civil Aviation (DGCA) to fast track approvals for new airlines wanting to start RCS flights.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Aviation sector")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}