At a time when the aviation fuel prices have been rising, putting pressure on the prices of the cheap domestic air tickets, the Indian Civil Aviation Ministry has come up with a proposal which works in just the opposite direction. This proposal related to the establishment of the Essential Air Services Fund whose corpus would be used to fund the development of airport infrastructure in small cities. This proposal comes at a time when the aviation industry in India has been reeling under huge debts and only a few airlines have managed to show up profits in a quarter or a financial year.
The EAS fund will not only be used for developing the airports at the select sites but it will also be used for providing subsidized flight tickets for flying to these destinations. This is expected to improve the connectivity of air travel from the large cities to the smaller cities and towns and especially with those ones which have immense tourist potential. The government has identified 19 such sites in India which receive good number of tourists but lack the affordable air connectivity.
The fund was seen as a necessity since there have been instances in the past where the existing domestic players have not been able to provide a sustainable service due to surmounting losses in operating to these areas. Further, there has been general reluctance among the airliners to operate the smaller fleet of aircraft due to uncertainty in tapping the markets profitably.