Incentivise airlines’ low-traffic ops: panel

New Delhi The government may decide to significantly relax the mandatory quota norms for domestic airlines to fly to underserved and remotely connected regions as recommended by a panel formed to review air connectivity in these regions. The report submitted by the panel led by former joint secretary Rohit Nandan, now Air India head, to the Civil Aviation Ministry, has also suggested setting up of a non-lapsable regional air connectivity fund to cross-subsidise operations in regions with thin traffic.
The recommendations follow several airlines’ demand to exclude some routes from category II (regions with difficult terrain and remote areas), as they have become commercially viable on their own with passenger load factor (PLF) above 70 per cent. The committee, however, did not agree on exclusion of the routes.
According to the panel, route dispersal guidelines (RDGs) or quotas, restricts the airlines’ commercial freedom and impact the “fare structure across board”.
“In order to fulfill the commitment of flying on certain routes, airlines tend to cherry-pick or indulge in cream skimming to limit their commercial losses. This leaves out large areas from air connectivity,” the report observed as a problem with the existing RDG. The ministry had formed the panel in April 2011 to undertake a review of the current RDG and recommend measures to promote and enhance regional connectivity.
06/02/12 Smita Aggarwal/Express India

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Categories: Indian Aviation- In General Feb 2012