Govt panel for seat underwriting on flights; 4 states on board

A government panel has recommended “seat underwriting” or buying seats on a flight by states to incentivise private airlines to provide connectivity on loss-making routes that remain either unconnected or under-served. Four states — Madhya Pradesh, Mizoram, Chhattisgarh and West Bengal — are learnt to be agreeable to such an arrangement.
The committee headed by Rohit Nandan, now Air India chief, has advocated states’ financial support as a critical factor to bring connectivity to the region and “guarantee of some business to the airlines”. The report, submitted to the civil aviation ministry in January said, “State governments can utilise these seats for their own employees and also to boost tourism, on the other hand the airlines will find some number of seats blocked.”
Underwriting seats should be accompanied with lowering the state taxes on jet fuel. It further added that the burden on state exchequer would decrease once the market grows.
04/02/12 Smita Aggarwal/Indian Express

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Categories: Indian Aviation- In General Feb 2012