New Delhi: The Government today unveiled its ambitious regional connectivity scheme which will cap airfares at ₹2,500 for one-hour flights to unserved and under-served airports that are 476-500 km apart. Flying between airports that are 776-800 km apart will cost ₹4,070, while travelling between metros will be a tad more expensive.
This follows the government’s proposal to provide Viability Gap Funding for fixed wing aircraft flights covering 200-500-km provided at least nine seats are priced at an all-inclusive fare of ₹2,500. The government will provide the operator a viability gap funding of ₹3,750 per seat sold under the regional connectivity scheme (RCS) up to a maximum of 40 seats per flight. The VGF has been capped at ₹4,170 for 776-800-km.
To be eligible for the VGF, an operator will have to operate regular services to at least one airport, which at present does not have regular flights.
The proposal forms part of the draft RCS, which has been put in the public domain for comments and suggestions from stakeholders including airlines, airports, and State governments.
The Centre wants the comments by July 22 on the RCS before taking a final view.
To finance subsidised flying across the country, the draft policy suggests that a Regional Connectivity Fund (RCF) be created into which money from a levy or fee on all domestic flights other than those operated to islands and in the North-East will flow.
01/07/16 Business Line
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This follows the government’s proposal to provide Viability Gap Funding for fixed wing aircraft flights covering 200-500-km provided at least nine seats are priced at an all-inclusive fare of ₹2,500. The government will provide the operator a viability gap funding of ₹3,750 per seat sold under the regional connectivity scheme (RCS) up to a maximum of 40 seats per flight. The VGF has been capped at ₹4,170 for 776-800-km.
To be eligible for the VGF, an operator will have to operate regular services to at least one airport, which at present does not have regular flights.
The proposal forms part of the draft RCS, which has been put in the public domain for comments and suggestions from stakeholders including airlines, airports, and State governments.
The Centre wants the comments by July 22 on the RCS before taking a final view.
To finance subsidised flying across the country, the draft policy suggests that a Regional Connectivity Fund (RCF) be created into which money from a levy or fee on all domestic flights other than those operated to islands and in the North-East will flow.
01/07/16 Business Line
