Indian Government To Subsidize Airlines For Flying on Unproductive Sectors

When considered specifically in the case of Indian Aviation, there are some segments of air travel which are considered strategically important and there is a need to maintain regular connectivity of these regions with the other parts of the country. Though there is an existence of the rail and road based connectivity with these regions, it is quite limited due to the extreme weather conditions or due to the highly inaccessible terrain. In order to maintain people to people contact and to carry ahead the process of national integration, the airlines are required to deploy 10 percent of their capacity to the operation of flights in these regions, offering cheap air tickets to the people to fly these segments. These regions, which are unproductive but are necessary to operate on, are the Jammu and Kashmir, the whole of the north-east region and the Andaman and Nicobar Islands.

The airlines have been reeling under the financial pressure for the last few years and profitability is hard to come by. Add to it the burden of operating on the unviable routes and the situation grims further.  The government has been abreast with this demand of the airline not to make it mandatory for them to fly on these sectors. If allowed, it will release the additional capacity which is currently deployed on these sectors which will help the airlines to use it more productively. In a recent move, the government has eased the pressure on the airline companies from the requirements of this mandatory provision. While the 10 percent rule will be struck off, the airlines will be getting the subsidy for flying on these sectors. There has been setting up of a separate fund called the Essential Air Services Fund for this purpose. It will be funded by the budgetary support as well as by levying a cess on the passengers flying between the metropolitan cities.

The officials refute the chances of the rise in fares of metropolitan operating routes citing that the airlines are already doing it. The cheap flights which the people are getting now will continue to remain to same. Rather, the pricing of the tickets will become more transparent because the customers will know what they are paying for, which earlier remained undisclosed.

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