However, the cap on the airfares will be applicable only to a limited number of seats in an aircraft and the passengers will be eligible for subsidised fare on a first-come-first served basis.
Only routes covering a distance of 200-800 km connecting a ‘less connected or unconnected’ airport will qualify for the regional connectivity scheme and the airfare cap will be proportional to the air distance travelled.
Airfares will be capped in the range of Rs.1,700-Rs.4,070 and will be revised every quarter based on the prevailing inflation rate.
While the scheme will be applicable to airports with no flight connections in the previous two flying seasons, the government has identified 16 airports, receiving seven flights a week, which will also fall under the scheme.
Some of them are: Agra, Allahabad, Pantnagar, Diu, Shillong, Jamnagar, Bhavnagar, Kullu, Tezpur, among others.
“As the Indian economy grows, consumption-led growth in populated metros is expected to spill over to hinterland areas. This is also expected to be on account of factors of production (land, labour, etc.) becoming costlier in the densely populated metro cities. In this scenario, air connectivity can provide required impetus to the economic growth of such regional centres,” said the draft regional connectivity scheme document. The document has been uploaded on the civil aviation ministry’s website for purposes of receiving public comments till July 22.
“We feel regional connectivity is going to boost air traffic growth tremendously, Now, the Centre should collaborate with states and offer last-mile connectivity to passengers,” said D. Sudhakara Reddy, national president of Air Passengers Association of India.
While the Centre will provide 80 per cent subsidy to airlines for three years to fund the losses they incur, to enable them to charge lower airfares to passengers, the remaining 20 per cent will come from the states.
The Centre will set up a regional connectivity fund, to be be financed by a cess charged to airlines flying on metro or trunk routes for each departure.
The cess, which will likely be levied beginning August 1, may marginally increase airfares on such routes.
“If an airline is not able to develop a route within three years even after (our) giving viability gap funding, then we will give a cooling off period of two years before the route can again qualify to become a part of the scheme,” Minister of State, Civil Aviation Mahesh Sharma said.
He said if the seat occupancy of the airline on a particular route exceeds 90 per cent, the subsidy will be reduced by 50 per cent in the subsequent year. Mr. Sharma said subsidised fares will be applicable only on nine seats (for 12 to 18-seater plane) and 40 seats (for aircraft with 80 or more seats).
The government may provide higher subsidy to the airlines if the cost of aviation turbine fuel goes up in future, Civil Aviation Secretary RN Choubey said.
The airlines will be mandated to fly at least three flights every week on such regional routes and the subsidy will be provided for maximum seven flights per week.
“There are around 30 inactive airports which are low-hanging fruit and can be revived immediately,” Civil Aviation Minister Ashok Gajapathi Raju said.