BUSINESS

Centre turns cautious on regional connectivity scheme’s prospects

Tentative landing:Revival of the Mysuru airport depends on the viability gap funding under the scheme.— FILE PHOTO  

A day ahead of its introduction, the Centre has turned “optimistically cautious” about its regional connectivity scheme, which aims to activate torpid airports and make flying a cheaper option, Civil Aviation Secretary R.N. Choubey said.

“This particular area of business is happening for the first time on a large scale so it is not something which is easily understood (by entrepreneurs),” Mr. Choubey said at the sidelines of an event here.

“Therefore, I can say that we are cautiously optimistic.”

“I am not anticipating a flood of entrepreneurs who will queue up immediately after the scheme is launched but we will provide full support to airlines which wish to be a part of it,” he said.

The civil aviation secretary’s comments comes a day ahead of the regional connectivity scheme that will offer passengers air fares for Rs.2,500 for an hour’s journey to an unconnected airport. The Centre plans to revive dormant airports and attract regional airlines under the scheme.

To help airlines offer cheaper airfares on such flights, the Centre will provide subsidies to them by creating a regional connectivity fund. The fund will be financed by a levy on domestic flights on major routes.

However, most domestic airlines have termed the move illegal and are likely to challenge it in courts.

In a bid to make the scheme more attractive for lessors, the Union Civil Aviation Ministry has issued draft rules to help aircraft leasing firms to take back aircraft quickly from defaulting airlines.

Leasing norms

On request of the lessor, the registration of all planes will be cancelled within five working days and consequently, the Centre has to take action for export and physical transfer of the plane within another five days, draft Aircraft (Amendment) Rules, 2016 published by the Ministry said here.

When Kingfisher Airlines had ceased operations in 2012, the lessors faced legal hurdles in re-possessing the aircraft as the regulator, Directorate General of Civil Aviation, was not de-registering the aircraft which was an essential requirement for taking back the planes.

Minister of State Civil Aviation Jayant Sinha said that land and skill development were the two big bottlenecks grappling the aviation sector today.

“There are two constraints – skill development and land development.

“We need to resolves these bottlenecks to achieve a consistent 10-12 per cent growth in aviation sector every year,” Mr. Sinha said at the event.

He said availability of large area of land is an issue to address the capacity constraint at airports.



After the scheme is unveiled, we will provide full support to airlines which wish to be a part

of it

R.N. Choubey,Civil Aviation Secretary





The Ministry does

not expect a flood

of entrepreneurs queueing up for

the scheme