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Connectivity boost: Revival plan for 50 no-frills airports set to take-off

Airlines operating from these airports will get sops on landing, parking charges as well as tax benefits.

Written by Sunny Verma | New Delhi | Published: June 4, 2016 1:22:39 am
civil aviation ministry, draft aviation policy, aviation industry fares, airplanes fares, air fares policy, air fare regulation, india news, business news, economy news, latest news Ahead of the upcoming National Civil Aviation Policy, likely to be made public in two weeks, the government has renewed thrust on improving regional connectivity across the country.

The government has firmed up plans to revive 50 low-cost or no-frills airports across the country in the next three years, Civil Aviation Secretary Rajiv Nayan Choubey said. Airlines operating from these airports will get concessions on landing, parking charges and other expenses, he said. Location of these airports are being finalised after consultations with the airlines to ensure commercial viability.

“We will be reviving the low-cost airports. For the revival of those airports, as no-frills airports we are preparing a scheme, which will be in furtherance of the civil aviation policy. Within the next three years, we plan to operate on at least 50 such airports,” Choubey told The Indian Express on Thursday. Ahead of the upcoming National Civil Aviation Policy, likely to be made public in two weeks, the government has renewed thrust on improving regional connectivity across the country.

Most of these airports are currently non-operational due to lack of traffic and therefore airlines’ reluctance to operate from these. But the government expects these airports to pick up commercially post revival due to lower airport charges, a host of tax benefits and a cap on fares on regional routes. The Regional Connectivity Scheme (RCS) in the aviation policy has proposed to cap fares at Rs 2,500 for a one-hour flight. It proposes a 2 per cent levy on all domestic and international flights on metro routes to support regional connectivity.

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The government will also exempt service tax on tickets on RCS routes, and remove excise duty on aviation turbine fuel drawn by airlines on these routes. “These airports will be demand-driven, in the sense that the airlines will also have a say in selecting their location to ensure commercial viability. Now that the ATF (Aviation Turbine Fuel) prices are also supportive to the growth of regional airports, we hope airlines will come forward to fly from these airports,” Choubey said.

Some of the non-operational airports of the AAI include Rupsi and Shella in Assam, Passighat and Tezu in Arunachal Pradesh, Jogbani, Mazaffarpur and Raxaul in Bihar, Bilaspur in Chhattisgarh, Chakulia and Deoghar in Jharkhand, Khandwa, Panna and Satna in Madhya Pradesh, Vellore in Tamil Nadu, Asansol and Malda in West Bengal.

The aviation ministry is also in talks with airlines to encourage business from nearly two dozen operational airports of AAI from which no scheduled commercial flight took off, the sources said. The AAI had spent Rs 298.60 crore to maintain these airports while the revenues earned from operations at these locations were a Rs 100.33 crore in the year 2014-15.

Finance minister Arun Jaitley had first outlined the government’s plan for revival of unserved and underserved airports.

“There are about 160 airports and air strips with state governments which can be revived at an indicative cost of Rs 50 crore to Rs 100 crore each. We will partner with the state governments to develop some of these airports for regional connectivity. Similarly, 10 of the 25 non-functional air strips with the AAI will also be developed,” Jaitley had said.

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