Govt wants new players to fly on regional routes

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).

However, some expressed reservations. “To encourage NSOPs to fly to remote airports, the government has to allow self-ground handling by operators as the cost is too high,” said Bhupesh Joshi, chief executive officer of Club One Air, a chartered airline.

The civil aviation ministry is expected to come out with a separate paper on RCS in 10 days, in which the proposal might be mooted. The paper will identify routes and the modality of Viability Gap Funding (VGF).

Under RCS, the government plans to target a fare of Rs 2,500 for a one-hour flight in identified routes. As fares are low and wouldn’t cover costs, VGF will be given to the lowest bidder.

About 20 per cent of it will be borne by governments of states where the scheme is implemented. It will cover about 22 areas. The central and state government will share the burden in the proportion of 80:20.

Friday, 17 June, 2016
Business Standard