Thursday, April 13, 2006

Busy airports may cost airlines more

New Delhi: The government plans to encourage airlines to fly on non-viable routes by lowering user charges at those airports using a system of subsidy funded by the proposed aviation cess on passengers and carriers.
There is also a proposal to increase the charges paid by airlines on busy airports to decongest them. At present, airlines have to deploy a certain percentage of their fleet on smaller routes to be able to fly the lucrative ones.
Civil aviation ministry officials say the proposed model is likely to be a part of the forthcoming civil aviation policy. It is expected to reduce the burden on private airlines considerably.
It will not be mandatory for carriers to operate routes with low occupancy, which will free aircraft for more lucrative routes.
According to domestic aviation companies, the occupancy on non-metro routes is usually less than 50 per cent, against the break-even occupancy of 65 per cent.
13/04/06 Bipin Chandran/Business Standard
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