The Centre has proposed RCS aimed at reviving flight operations at 50 regional airports in the next four years.
According to the scheme, Centre will provide three-year subsidy to fund the losses of airlines so that they offer airfares at Rs. 2,500 for an hour’s flight on half the seats. The Centre has set up a regional connectivity fund, 80 per cent of which will be financed by levying a cess on other domestic routes, except north-eastern states and regional sectors and the rest will flow from the states.
Hike passed on
Although the levy will be charged on to domestic airlines, airlines are expected to pass on the burden to consumers.
Mr. Choubey said that the Centre will be able to collect around Rs.400 crore from this levy every year which will be used to promote regional air connectivity. “Our aim is to increase domestic ticketing four times by 2023 from eight crore at present,” he said.
Leading domestic airlines have already opposed the move to impose a levy fund subsidies for regional flights and are likely to challenge it in the courts. During the launch of the scheme, SpiceJet chief Ajay Singh had opined that government needs to fund such schemes from its own budget “instead of imposing more tax on consumers.”
HAL’s Dornier
Hindustan Aeronautics Limited, a state-owned aerospace and defence company, may soon lease planes for civilian use on non-metro routes, Mr. Choubey said.
“HAL manufactures 19-seater Dornier planes and it is exploring the possibility of leasing these aircraft for civil aviation purposes,” the Civil Aviation Secretary said, “But the proposal is still under examination of its Board,” he added.
Mr. Choubey said that national carrier Air India has plans to lease 10 Dornier planes from HAL to become part of the regional connectivity scheme.
