Tuesday, December 29, 2015

Subsidy scheme to woo airlines

Puducherry:  Hyderabad-based TruJet and Bengaluru-centered Air Pegasus are reported to be strongly bidding for operating flight services through Puducherry.

The Puducherry Government had launched a rejigged subsidy scheme to woo airline operators after Air India's budget arm, Alliance Air, abruptly suspended its flights to Bengaluru after six months of operations, following a dispute over payments under the Viability Gap Funding scheme.
"We're processing the proposals submitted by the operators and are negotiating with them over some changes in their offers," Chief Secretary Manoj Parida said.

What the Government is anxious about is entering into any sort of arrangement where an assured subsidy turns out to be a disincentive to the operator for aggressively pushing for ticket sales.

The Government is offering a subsidy of Rs. 2,500 per unsold seat with an annual cap of about Rs. 2 crore.

Sources say that one of the core aspects of a new deal would involve charting out a viable circuit that is attuned to tourist demand. Given the domestic tourist trends, a triangular circuit that involves Puducherry, Chennai and Bengaluru, is what the Government is looking at.
29/12/15 M. Dinesh Varma/S. Prasad/The Hindu
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