Aviation Minister A Raju hopes new policy would make flying 'easy'

New Delhi: The government on Thursday hoped that the new civil aviation policy will ensure better viability gap funding which will result in improved connectivity of smaller airports by airlines operators and benefit the passengers.
Responding to supplementaries in the Lok Sabha during Question Hour, Civil Aviation Minister A Gajapathi Raju said the funding was to be provided by the Centre as well as the state governments on a 80:20 ratio and 90:10 ratio for Northeastern states.
He said revenue from passengers as well as viability fund will help the airline operators. "I hope that the scheme
succeeds," he said.
It was pointed out to the ministers that certain airlines in the recent past have stopped services to some smaller airports citing lack of revenue.
"The National Civil Aviation Policy, 2016 envisages to take flying to the masses by making it affordable and
convenient. To promote this objective, the policy provides for regional connectivity scheme by way of upgradation/development of no-frills airports and viability gap funding to the airlines operating to these airports based on demands," Raju said in his written reply.
28/07/16 PTI/First Post

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IAAI suggests amendments in the new aviation policy

The IATA Agents Association of India (IAAI) has expressed some concerns of the new National Civil Aviation Policy (NCAP). According to IAAI, the policy is silent on many aspects and segments of airline operations like fare structuring, safety & security, standard and quality of airport/ground handling services, etc. that are in violation of relevant Indian Aircraft Rules and IATA Resolutions.

This has led to lack of quality and losses being incurred by the travelers and the Passenger Travel Agents alike, deprivation of Travel Agency Commission, apart from causing huge losses of Revenue to the Government of India by way of Service Tax and Income Tax evasions, IAAI opines.

IAAI’s Committees that deal with the Government, IATA & Industry Affairs have identified the various factors that are the root causes and drawn up a comprehensive list of certain suggestions to rectify the same from which some of the prime ones are listed below:

a)  Minimizing and standardizing ATF prices all over India enabling airlines to economically benefit with enhanced payload.

b)  Enforcement of the statutory right under Aircraft Rules – each passenger can carry a checked-baggage free of cost.
18/07/16 TravelTrendsToday

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Civil aviation policy: Warts apart, a credible policy

The National Civil Aviation Policy 2016 aims to provide an eco-system for the harmonised growth of various aviation sub-sectors. The Policy is credible in that it is wide and addresses as many as 22 policy areas while still preserving and maintaining an integrated view of the sector in terms of the vision, mission and objectives outlined in it.
Also, it is noteworthy that the policy frameworks outlined for each of the sub-sectors have consistent reference to the identified objectives in terms of establishing an integrated eco-system; enhancing ease of doing business through deregulation, simplified procedures and e-governance; ensuring safety, security and sustainability of the aviation sector, etc.
Given the pendency of some of these issues and the associated debate, there had to be trade-offs. What was important was that adequate debate preceded the policy pronouncement and the trade-offs were identified up-front, analysed, and informed choices made through the stakeholder consultation process. The Ministry of Civil Aviation undertook extensive consultations, providing stakeholders the opportunity of sharing their perspectives and viewpoints.
So is this a good policy document? A defining feature of a good policy is that it should be amenable to speedy and effective implementation. NCAP’s focus on making flying affordable for the masses and the release of associated implementation details for stakeholder consultation on 1st July is a good example of the policy trying to address longer-term priorities – looking beyond minor tweaks, while remaining focused on speedy implementation
06/07/16 Peeyush Naidu/Financial Express

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New Civil Aviation Policy: How flying may get more expensive

New Delhi: With the new civil aviation policy proposing to extend the so-called hybrid till model for determining airport charges to state-run (Airport Authority of India-operated) airports also, passengers will have to fork out more as user development fees (UDF). Besides, they could also suffer from airlines deciding to treat their share of the extra cost as a pass-through to the passengers, analysts said.
This runs contrary to the new policy’s objective of making air travel more affordable.
Airport charges are universally determined under single till, double-till and hybrid-till mechanisms. In all cases, airport operator gets a predetermined internal rate of return (IRR) as per the concession agreement. Under single-till mechanism, revenues from both aeronautical (landing, parking and ground handling) and non-aeronautical (duty-free shops, hotels, restaurants and airport infrastructure) segments are taken into account to determine the IRR.
However, under the hybrid till method, which is currently being used by joint venture (public private partnership) airports, only 30% of non-aeronautical revenue is taken towards IRR, allowing the operator to pocket 70% of the non-aeronautical revenue. The idea is to encourage the operators to expand airport infrastructure. But the lower revenue base compared to single-till method practically prompts the operators to levy higher charges (UDF) on passengers and airlines.
04/07/16 Bilal Abdi/Financial Express

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Laying tarmac for smooth takeoff

For the first time in the history of Indian civil aviation, a policy document covering all aspects of civil aviation has been approved by the Cabinet.

The Ministry of Civil aviation has gone through an extensive consultation process with all stakeholders and the policy is a positive move and will benefit the passenger, along with the anticipated growth.

The National Civil Aviation Policy, 2016, keeps in mind the passenger and paves the way for long-term growth of the sector. If the 2015-16 fiscal saw 80 million domestic passengers, the target is to touch 300 million by 2022. The vision is to have a long-term policy which will achieve domestic passenger traffic of 500 million by 2027 and international traffic of 200 million. The document also emphasises on safe, secure and affordable air travel in the years to come.

The scrapping of 5/20 rule and making it a simple 0/20 is an excellent policy directive. This will enable Indian carriers – both low cost and full service airlines – to fly overseas and offer very competitive fares. This will also improve connectivity as most of the domestic airlines have a vast network across India. The domestic carriers will require wide-bodied aircraft to compete with the existing international carriers. This will make overseas travel affordable and simple as the connectivity issue will automatically get resolved. This will also enable passengers from all operating airports to fly overseas, and that too with less hassles.

The Indian carriers will now be free to enter into code-share agreements with foreign carriers for any destination within India on a reciprocal basis.  International code-share agreements between Indian and foreign carriers will also be completely liberalised, subject to air services agreement, which India has with 109 countries spread across the world.

India has 132 airports supporting all operational facilities but the airlines are unable to fly to all the operating airports. If this is facilitated, it will lead to better connectivity, simply because they do not have sufficient load factors. Keeping this in mind, the government will promote the growth of scheduled commuter airlines (SCAs). The SCAs shall have aircraft with capacity of less than 100 seats. There will be no restrictions on the number of aircraft for operating an SCA but will only need to operate a minimum number of movements per week. This will enable activating several ghost airports which number to 25% of the operational airports, thus increasing connectivity.
03/07/16 Sudhakara Reddy D/Deccan Herald

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Many airports without passengers: will the new aviation policy make a difference?

The recently unveiled National Civil Aviation policy aims to transform the aviation map of India by reviving numerous airports and airstrips that are either not operational or witness little activity. Boosting regional air connectivity is a highlight of the policy - a task that may prove challenging given the present domestic passenger traffic trends at our airports.

The country is dotted with as many as 450 airports and airstrips but only 75 have scheduled operations, the policy document says.

A number of these belong to Defence establishments while some others belong to State governments or private entities. Many of these airports or airstrips are not operational or have fallen into disuse. They also include newly constructed airports that have not taken off, for various reasons.

The large Metro airports account for the bulk of the domestic traffic. The data released by the Airports Authority of India (AAI) for April 2016, relating to 82 airports (international and domestic airports, apart from ones owned by state governments and private parties), reveals that nearly 65 per cent of the domestic passenger traffic totalling nearly 1.6 crores was handled by just six airports - Delhi, Mumbai, Bangalore, Chennai, Kolkata and Hyderabad. And just 26 airports had recorded traffic exceeding one lakh domestic passengers that month. And between them, these airports accounted for over 90 per cent of the total domestic traffic handled.
Some of these airports have also witnessed a dramatic growth in passenger traffic year over year - over 50 per cent in the case of Varanasi, Mangalore and Visakhapatnam. Six other airports have recorded a growth of 25 to 50 per cent.
The majority of the remaining airports have handled less than 50,000 domestic passengers. Some of the small airports have recorded a big surge in traffic but the total number of passengers they have handed are relatively small. Among the airports which have accounted for more than 50,000 domestic passengers, Udaipur, Dehradun and Madurai have seen a growth of more than 50 per cent, while Imphal and Vadodara have recorded a surge of 25 to 50 per cent.

The Regional Connectivity Scheme, to be implemented from the second quarter of 2016-17, aims to revive the fortunes of un-served or under-served airports and routes. The government offered several incentives to promote these underserved locations.
28/06/16 T. Ramachandran/The Hindu

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Breaking the shackles of India's aviation sector

For the longest time, the Indian aviation sector was considered a rich man’s industry. While the industry continues to be highly taxed, the efforts of the government through the new National Civil Aviation Policy to make flying more affordable are laudable. Besides, tweaking the 5/20 rule to a 0/20 rule, which now does not restrict Indian airlines to wait for five years before flying overseas, would bring in much-needed competition into the space.

More so, by allowing up to 100 percent FDI in the aviation sector, which has caveats attached, the government has given Indian airlines a chance to improve their balance sheets. Of course, by capping the amount of FDI being invested by foreign airlines to 49 percent, it is to be seen what other kind of foreign investors would be interested in risking their monies in an industry which has been accumulating losses in excess of $1 billion, consistently, for the last decade. A concern that Peeyush Naidu, partner at Deloitte India, also shares: “While the increase in FDI for aviation is welcome, as it will allow flexibility, we are unlikely to see investors suddenly rushing to invest in airlines just because the cap of 49 percent has been removed.” He goes on to add, “It remains to be seen whether other investors such as private equity players and the like would have the risk appetite to make such investments.”

That said, on paper, all these recent developments in the aviation industry augur well for the airlines and passengers. Air Pegasus MD Shyson Thomas believes that the new FDI norms along with recent policy changes “would act as a catalyst for funds to pour into the Indian aviation sector that is on cusp of take off”.
22/06/16 Anshul Dhamija/Forbes India

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Cap on air fares may not make much impact in TN

Chennai:  The cap of ₹2,500 per hour on airfare for flights promoting regional connectivity, announced recently in the Civil Aviation policy, may not entice travellers in Tamil Nadu to switch over from travelling either by rail or road to air.

This is because of the good road and rail networks in the State. Apart from the nearly 23,000 buses belonging to State transport undertakings, there is a large number of private bus operators connecting different parts of the State.

“It is cheaper to travel by road in Tamil Nadu even as both government and private buses ply to every nook and corner of the State. There is an effective train service across the State. These advantages make it difficult for somebody to change over to air unless there is a significant reduction in air fare,” says B Govindarajan, Chief Operating Officer, Tirwin Management Services (P) Ltd, a Chennai-based aviation consultancy company.
At present, intra-State air traffic is heavily dependant on Chennai, which keeps feeding international airports Madurai, Coimbaore and Tiruchi. However, no airline has service between other major cities such as Madurai to Salem or Coimbatore to Tiruchi because of the short distance, he said.

The State has small airports in Salem, Tuticorin and Vellore and a private use category aerodrome at Hosur.

On a daily basis, there are 15 government buses from Chennai to Tiruchi and Coimbatore, and an equal number of private buses that ply mostly during night.

Travelling short distances by air can be time consuming, says B Desikan, an advocate. Travel by road from Chennai to Tiruchi takes around five hours. “However, if I want to take the flight, I will spend one hour to reach the airport, another two hours at the airport and 45 minutes flying time,” he said.
22/06/16 TE Raja Simhan/Business Line

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Spicejet CMD Ajay Singh criticises new aviation policy

In a veiled criticism of DGCA's proposed move to fix lower ticket cancellation charges and a nearly five-fold hike in denied boarding compensation, SpiceJet's CMD Ajay Singh on Thursday said such issues should be left to the airlines and their customers.

"Sometimes different elements of the government work at cross purposes. As long as the airline makes it clear to the passengers at the time of buying tickets as to what the cancellation charge policy, then it is the contract between the airline and the passenger. "That should not be interfered with by any other authority," Singh said at an event here.
He said that any increase in fuel prices, airport fee or levying of transaction charges only enhances an airline's cost. Aviation regulator Directorate General of Civil Aviation has early proposed a raft of passenger-centric measures including to fix cancellation charges not more than the base fares as against around Rs 2,000 being charged by domestic carriers across the board and reducing the extra checked-in baggage fee.
"We believe that services need to be unbundled and we believe that people should pay only for actually what they subscribe to. If somebody wants to travel without luggage, then he should have the benefit for not carrying the luggage," he said.

Singh said that India is a "price sensitive" market and there is a need to bring down the cost and make airlines profitable. "The 20 per cent growth is the direct consequence of the reduction in air fares from last year to this year. That must continue if we want to see this sector growing," he said. India has been the fastest growing aviation market in the world with domestic passengers travel demand spiking 20 per cent in the last fiscal.
23/06/16 PTI/DNA

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‘Scheduled commuter airlines may face glitches’

Mumbai: A new category of airlines called scheduled commuter airlines proposed in India’s first civil aviation policy might find it hard to fly given the fine prints, according to ICRA.

“Nuances of the policy (primarily about route dispersal guidelines, RDG2) will have to be understood before private players start investing,” said a note from ICRA talking about the challenges that remain for these new category of airlines.

According to it, adherence to safety guidelines by comparatively smaller airlines would be another big challenge for the industry.

The Civil Aviation Ministry has proposed the new category of airlines which are essentially lower capacity carriers connecting remote locations. The airlines are expected to be low-cost carriers given that they would benefit from relaxed guidelines, fiscal support and probable subsidy support.
21/06/16 Business Line

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Civil Aviation Policy a big step forward, says Tony Fernandes

In a move that signalled the government’s strong reform drive, the FDI floodgates have been thrown open in nine sectors, including aviation. The government has given the nod to foreign non-airline entities to invest up to 100 per cent in domestic airlines. These measures, coupled with the Civil Aviation Policy last week, are bound to ward off at least some turbulence in aviation sector. Bloomberg TV India discusses the efficacy of the measure with Tony Fernandes, Group CEO, AirAsia.
Let’s start with your view on the overall policy intent of the government, with regard to the opening up of FDI channels. Companies cannot invest beyond 45 per cent, but funds will be in a position to invest beyond 49 per cent.

I think this is a great step for the Indian aviation sector and for the government. The fact that they removed the 5/20 rule and replaced it by 0/20, is a compromise. We would love to see it removed completely. But I think it was a surprise, a very positive step to see that foreigners could now own 100 per cent of an airline. It is a good step and it shows the intent of the government to bring in more capital into this industry which is a great driver of the economy.

In terms of brown field expansions, that is quite a booster for airport developers in India…

It is a superb and very progressive move. Probably, the most progressive in Asia to allow foreign and private companies to build new airports with 100 per cent FDI. I really applaud that. I urge other countries in Asia to look at what the Indian government is doing.


Certain quarters of the industries have expressed a grouse to the effect that the government could have been more aggressive in the Civil Aviation Policy. You spoke about doing away with the 5/20 norm. The weightage on ‘5’ has gone. But in terms of ‘20’, aircraft rules still remain. How big a deterrent do you think it is for the new entrants in the space of civil aviation, which is a capital-heavy, long gestation-period space?

It is not perfect. India is a complicated country. The fact that they have actually done it, which is more than any other government has done previously, is indeed a step forward. And we continue to lobby, we continue to change and we continue to seek better policies. But I applaud that they have done something. At least, for the first time, we have clarity and we know what we need to do. That is not easy because there are so many vested interests. Local airlines have been lobbying against the 5/20, they talk about confusing credit systems and all this. But India is a fantastic market.
22/06/16 Pranoy Nath Banerji/Bloomberg/Business Line

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‘Aviation norms to make tickets dear’

Mumbai:  The new civil aviation policy will make travel costlier, said the International Air Transport Association (IATA), a trade association representing the airline industry on Tuesday.
"While the draft indicated that 'tariff at all future airports will be calculated on a hybrid-till basis', the final policy states 'future tariffs at all airports will be calculated on a hybrid-till basis'. This change will impact the basis for tariff determination for private airports in India," said IATA. It will also signal the Airports Authority of India to switch from the single-till approach used currently, to the hybrid-till mode.
For fixing the airport tariff, in the single-till model, revenue from both aeronautical (like landing, parking charges) and non-aeronautical activities (rent from shops in terminals etc) are taken into account. In the hybrid-till model, all aeronautical and 30% of non-aeronautical revenue is taken into consideration to arrive at the tariff that an airport can charge the airlines.
21/06/16 Times of India

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Chinks in the new aviation policy’s armour

India’s first-ever National Civil Aviation Policy (NCAP) formulated by the NDA governmentis no doubt well-intentioned and aimed at achieving overall growth of the sector in a structured manner. However, several shortcomings, as pointed out by analysts, could derail the projected growth and objective.

The policy has touched almost every aspect of civil aviation, but gives no direction for professionalising the Directorate General of Civil Aviation (DGCA) and Bureau of Civil Aviation Security (BACS), crucial entities that govern aviation safety and security in the country.

Though measures have been announced to strengthen both these entities and bridge the deficit, the policy is silent on how to radically transform these organisations to meet modern-day challenges and to be process-driven to deliver world-class service.

With around 20 per cent growth in the number of air passengers, what India needs is strong air safety and security regulators.

The expected upside in helicopter operations, private flying and regional airlines will add to the pressure.

Kapil Kaul, Chief Executive Officer, South Asia, Centre for Asia Pacific Aviation (CAPA), says: “India’s safety and security dynamics are structurally changing, NCAP is not focused on managing these challenges.”
20/06/16 Lalatendu Mishra/The Hindu

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Civil aviation policy potential gamechanger

The Modi government’s integrated Civil Aviation Policy has the potential to be a gamechanger not just for the airline industry’s revival and growth but also for the government in terms of policy-making process and orientation. Sustained engagement with stakeholders and a win-win policy orientation can be adopted for other sectors too. The crux of the policy is the dove-tailing of industry growth with passenger benefits.

The government wants more members of the 30-crore strong middle class to fly which would help the troubled airline industry by boosting revenues and possibly profitability too. Though the low-cost airlines played a major role in making flying affordable for the upper middle and middle classes, the growth and expansion in number of tickets sold has not been substantial and sustained. One such initiative is the Regional Connectivity Scheme with a cap of Rs 2500 for an hour-long flight of about 500-600 kms which it hopes would lure more people to fly. Similarly, diluting the norms for airline companies to fly on international routes — the 5/20 rule — would mean more frequent flights and possibly at competitive prices.

The integrated policy covers 22 areas and most of them would be acceptable to all. But industry analysts and observers are critical of aspects the policy is silent about, be it privatisation of loss-making Air India or the roadmap for setting up an independent and autonomous Civil Aviation Authority.
20/06/16 New Indian Express

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Will valley flyers benefit from new aviation policy?

Silchar: The decision of the Central Government to give effect to a new civil aviation policy which among others includes regional connectivity to smaller cities at a fare of Rs.2500 per hour and low baggage fee. Airlines can charge only Rs.100 a kg for baggage in excess of Rs.15 kg and upto 20 kg. Along with that has come two other decisions to have more airports in interior areas and that highways are to be used as runways for connectivity in far-flung areas of the country. This is no doubt a positive move and has been hailed by the air passengers.

Along with that certain basic questions arise in the context of Barak Valley which is a landlocked region. During monsoon in particular, road and highways become undependable. To travel through National Highway 6 has become a nightmarish experiences with frequent fatal bus mishaps at Sonapur –Tongseng zone. Train services too are affected as it has happened now. For more than one month, the train services on the newly laid BG track between Silchar and Lumding have remained suspended. The worst sufferers are the people of Barak Valley who have no other alternative to move out. The only access open is air services.

But, the high cost of fare cannot be afforded by the people willing to go outside. Even the ‘open air policy’ of the Centre has not benefited this valley. No low fare airlines like Spice Jet or IndiGo has made any schedule of services for this airport. Long ago, Kingfisher did enter the area, but it was short-lived. The woes of passengers know no bound. On the ground of improvement of runway, all the afternoon air services have remained suspended from March 27. There is no certainty when the afternoon services will resume.
19/06/16 The Sentinel

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New aviation policy may help airline startups take wing

The new aviation policy will lead to the launch of new airlines in the country bringing in more cities on the national network, according to civil aviation secretary Rajiv Nayan Choubey. India currently has Air Costa, Air Pegasus and Trujet which fly smaller planes and command between them 1.4% of the domestic market. Air India, Jet Airways and SpiceJet also have sizeable small plane operations. Several entrepreneurs have showed interest in starting new airlines even with a small fleet of three planes while the policy was being framed, Choubey said, adding that he was expecting new launches in the months ahead. A lot of small plane manufacturers too have been in touch with the ministry, Choubey said. The ministry has told the manufacturers that while they sell their planes in India, they should also create training and aircraft maintenance facilities and offer aircraft and better aircraft leasing terms. The ministry plans to subsidize airlines that aim to connect cities that have not been connected before. A cess on most domestic flights will be levied to create a corpus that could help keep the fares on such routes at about Rs.2,500. “Since inception, Air Pegasus has positioned itself to connect with small towns and cities like Hubli, Kadapa, Belgaum and the policy announced today aims at increasing the connectivity to such smaller towns and cities by offering sops and incentives. This should motivate players like us to increase our connectivity further more with smaller towns as the policy will refund 80% of the losses incurred by airlines due to the cap of Rs.2,500 for one-hour flights between smaller towns and cities,” said Shyson Thomas, managing director, Air Pegasus. To be sure, many short-haul routes in the country like Delhi-Dehradun, Jammu-Srinagar and others are already available for as little as Rs.1,100 when booked in advance. The policy aims to take the number of such city pairs up, but experts say it’s going to be a challenging task.
19/06/16 Tarun Shukla/Dealstreet Asia

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Big idea clears skies to connect small towns

New Delhi: When the new civil aviation policy takes off, it will open up flights from Delhi to Bhatinda, Jaisalmer or to the coaching hub of Kota for just 2,500, almost matching train fares. At a meeting with the civil aviation ministry officials on May 25, state representatives have proposed routes from major hubs to tier II and small towns, with the potential of drawing good traffic. These routes are within one hour flying distance or less, and are eligible to offer tickets for 2,500 or less under the regional connectivity initiative.

At present, only two per cent of Indians book an airline ticket. Studies have shown that 50 per cent of the middle income group travel only once in four years on a flight. The reason: airports are too far from their homes.

Officials in the Ministry of Civil Aviations said most places proposed to be connected with major hubs such as Delhi, Mumbai, Kolkata, Chennai or Kochi have infrastructure in place to accommodate smaller aircraft. Carriers, however, are reluctant to fly to these places fearing losses. Tax incentives proposed under the new policy could help in reviving airports in smaller towns.
19/06/16 New Indian Express

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Airlines ‘should be left free to fly’ when and where they want

Global consultancy firm KPMG has for long been advocating a clear and transparent policy on civil aviation in the country and had also sent its recommendations to the ministry while the National Civil Aviation Policy (NCAP) was being drafted. In an e-mail interview with BusinessLine, Amber Dubey, Partner and India Head of Aerospace and Defence at KPMG, shared his views on the new policy, and whether it will work in the long run.


The controversial 5/20 rule has been dropped but one part of it has been retained. Do you think the policy should have completely done away with the norm itself?

The change in 5/20 is cosmetic. Though it is termed 0/20 it is effectively 3/20 since any new airline will take at least three-four years to build a fleet of 20 aircraft. The illogical, discriminatory and anti-competition 5/20 rule of 2004 should have never been there in the first place.  It also shows the pitfalls of a bad law — it takes 12 years to even modify it partially.  No other country has it. The share of Indian carriers in the global traffic to and from India is less than 30 per cent.  Blocking new Indian carriers from flying abroad allows global carriers to continue their domination. One hopes that as the Indian aviation industry matures, the 20 aircraft rule will also get abolished.  Airlines should be left free to fly when and where they fly.

Critics say only a few airlines will benefit from the new policy. Also, that the policy lacks infrastructure framework for long-term growth. How do you view these flaws in the policy?

The NCAP aims at a massive expansion of India’s flyer base by a slew of reforms.  These will aid affordability and connectivity.  Domestic traffic is expected to nearly quadruple from 81 million to over 300 million by 2022.  The tax benefits to MRO, cargo, ground handling, ATF etc will help airlines too. The landmark decision on 30 per cent “hybrid till” approach for airport tariffs will bring in more investors in the airport sector. It’s a bit unfair to say that NCAP will help “only a few” airlines.
17/06/16 K Giriprakash/Business Line

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Govt wants new players to fly on regional routes

New Delhi: The government is considering allowing non-scheduled operators (NSOP) to fly on regional routes. This, the government believes, will give the proposed Regional Connectivity Scheme (RCS) a fillip.

NSOPs expressed interest in flying on regional routes at a recent a meeting with Civil Aviation Secretary Rajiv Nayan Choubey. “The idea is to allow an NSOP to convert into a scheduled commuter operator so that they also can operate on those routes,” said a civil aviation ministry official.

According to the official, the ministry will set minimum flying hours for each aircraft of NSOPs for them to convert to a scheduled operator.

This will allow the NSOPs to publish flight schedules and fly on routes not served by existing scheduled airlines.

Despite the sops, scheduled carriers might not be interested in operating such routes because of the absence of smaller aircraft in their fleet. For instance, IndiGo operates with A320 aircraft. “Regional routes cannot be connected by large aircraft. I believe there will be new players that will operate with 18-20-seater aircraft,” Minister Ashok Gajapathi Raju told Business Standard.

“NSOPs already have 18-20-seater aircraft, which makes them suitable to fly those routes,” the official said. These operators feel that allowing them to take benefit of the scheme will be a game changer for the regional push. “In countries like the US, it is the chartered operators that connect remote cities. If we are allowed to operate on these routes, it will give a push to the regional connectivity plan,” said Jayant Nadkarni, president, Business Aircraft Operators Association (BAOA).
17/06/16 Arindam Majumder/Business Standard

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Regional connectivity plan does not cover all routes

New Delhi: The new civil aviation policy aims to cap the fare for a one-hour flight to around Rs 2,500 under the Regional Connectivity Scheme (RCS), but all such journeys will not come under the ambit.

The Ministry of Civil Aviation will be enforcing the upper limit on fares on routes selected under the scheme only after the state concerned, too, shows interest. The cap on fares for a 30-minute journey could be Rs 1,250 and for a 45-minute journey around Rs 1,800.

Airlines will get a Viability Gap Funding (VGF) if they opt for the scheme, and also if it is flying to or from an airport which is presently unserved.  For example, an airline could get VGF if it flies between Delhi and Bhatinda that is at present unserved, but not Delhi-Chandigarh or Bengaluru-Mangaluru.
Though the ministry is planning to roll-out the scheme within three months, there is a lot of ground to cover. The ministry will first bring out a draft paper on how it plans to roll-out the scheme in the next 10 days, and it may take another month before finalising it.
17/06/16 Deccan Herald

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