The Civil Aviation Ministry has finalised a draft policy under which commercially unviable routes from eighty tier 3 towns and cities will be offered in auction to airlines that will have the monopoly to run their services for a period of two to three years.
Under the auction process the airlines which bids in the auction asking for the least subsidy from the government to run services on the route would be the winner. There will be just one slot up for grabs on each route.
The process is akin to what the department of telecommunications has undertaken to encourage private sector telcos to roll out telecom services in rural India by auctioning circles to the bidder who offers to take the least subsidy which is paid through the USO Fund (money raised from telcos as percentage of their revenue) .
A top ministry official said that it expects that the draft note, which will be announced by the end of this month, will be cleared by the cabinet
in the next few months.
10/02/13 Disha Kanwar /Business Standard
