Thursday, January 03, 2013

AI to redeploy part of Northeast fleet on lucrative routes


With Alliance Air, subsidiary of Air India, withdrawing its flights from seven Northeast airports, including those in Tezpur, Lilabari and Shillong, following non-payment of funds by the North Eastern Council (NEC) from January 1, plans are now to redeploy the 60-seater ATR turboprops on profitable routes. However, Alliance Air will be operating from Guhawati, Silchar and Imphal.
The NEC finances Alliance Air’s operations each year through viability gap funding (VGF) of Rs 50 crore to 60 crore, in line with a memorandum of understanding between the two .
Confirming the development, the civil aviation minister, Ajit Singh, said, “As the NEC has refused to fund this amount in the future, Air India has decided to withdraw its flights from the Northeast.” While Alliance Air filed its VGF estimates in September last year for the grant of Rs 52 crore and Rs 55 crore for 2012 and 2013, respectively, the amount has not been paid to it, sources said.
The airline had been operating on the assumption the funds would soon be made available
According to the route dispersal guidelines of the ministry of civil aviation, an airline is required to ply 10 per cent of its total capacity to the Northeast, J&K and Lakshadweep.
03/01/13 Disha Kanwar/Business Standard
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