Commercial

India Readies Final Air Subsidy Rules

By James T. McKenna | September 6, 2016


Photo courtesy of KennyOMG / CC BY-SA 3.0

Indian aviation officials are finalizing rules to expand subsidized flights to underserved locations throughout that nation, according to media reports.

Civil Aviation Ministry officials are going through stakeholder and public comments on the draft Regional Connectivity Scheme, proposed July 1 to promote air service to hundreds of unserved or underserved sites in India. The main focus of the plan is to underwrite airline service to those locations. But the ministry specifically included helicopter service in its proposal, which states that helicopters “play a key role in remote area connectivity, intra-city movement, tourism, law enforcement, disaster relief, search and rescue, emergency medical evacuation.” 

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The Press Trust of India reports that ministry officials aim to publish the final form of the scheme by Sept. 15, following their consideration of comments that were due July 22. 

The connectivity plan would cap fares for flights to make them more affordable throughout India. The original proposal called for maximum fares of about $37 for a 30-min helicopter flight or a 1-hr trip of about 270 nm/500 km on a fixed-wing aircraft. 

To sustain the low fares, such flights would be subsidized by central and state government concessions and “viability gap funding” to operators selected to provide service in target markets. The national government may impose taxes on scheduled flights in more established markets in India to help pay for the subsidies.

The connectivity scheme is a key part of the National Civil Aviation Policy, which aims to place India among the world’s top three nations for domestic and international air passenger traffic.

At least three India states have agreed to participate in the connectivity scheme with the national government, according to various media reports. They are west-central Maharashtra, which includes India’s capital of Mumbai; the western-most state of Gujarat; and Jharkhand in eastern India.

In a related development, the newspaper The Indian Express reported today that the national government had approved subsidized helicopter service to 10 areas each in the northernmost states of Jammu and Kashmir and Himachal Pradesh. Those services will be focused on inaccessible sites in the states.

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