The civil aviation ministry has decided to come up with easy entry and easy exit rules for airlines providing regional connectivity, as it wants to ensure maximum industry participation in a programme that seeks to take flying to the masses.
“We do not want a situation where tough exit rules discourage airlines or companies from launching airlines to provide regional connectivity. We will provide an easy entry and easy exit option to operators,” aviation secretary RN Choubey told ET.
In the easy exit option, any airline that starts operations on regional routes will be allowed to shut shop and leave if it feels that the operations will not be profitable after a stipulated period of time. The duration will be decided at the time when the route is awarded to a particular airline.
These rules are likely to be part of the policy on regional connectivity that will be released within 10 days. Consultancy firm Deloitte is preparing the report for the government. Currently, no such exit rules exist for any other category of airlines.
The airline companies that want to participate in the regional connectivity scheme will be allowed to start with a single aircraft and the fleet has to be expanded to three planes in a year’s time.
Licences will be issued under the regional airline permit. Analysts welcomed the move. “Allowing easy entry and exit will lead to a surge in the number of new airlines with small fleet and small aircraft. It will be a big plus for the implementation of the regional connectivity plan,” said Amber Dubey, partner and India head of aerospace and defence at consultancy KPMG. “Also shows that the government is indeed serious about ‘less government more governance’, enhancing ease of doing business and respecting market forces.”
According to the regional connectivity plan, the government seeks to provide air connectivity with unserved airports at an airfare of Rs 2,500 an hour with small 18-20 seat aircraft. Regional flights will also get subsidy from the government — 80% of it will come from the centre and the rest from states.
The government intends to connect more than 300 defunct airports with flights.
It, however, doesn’t expect a huge participation during the initial days. The government expects the initial awards for routes on a nomination basis. The government has decided not to open the regional routes to non-scheduled operators, who will have to convert themselves into scheduled operators to become eligible. Don Mattingly Authentic JerseyShare This