A policy to encourage low-cost regional air connectivity to remote places across the country is likely to be tabled before the Union Cabinet soon, official sources said on Thursday.
A draft note has been prepared for circulation among the concerned ministries to enable the Cabinet take a decision on the policy, which is based on the recommendations of the Rohit Nandan Committee to connect smaller towns and cities on a low -cost basis, the sources said.
The policy, likely to be taken up by the Cabinet in the next few weeks, would involve development of regional air routes as well as destinations, about 40 of which have been identified for the first phase.
These include Muzaffarpur (Bihar), Asansol-Durgapur (West Bengal), Bilaspur (Chhattisgarh) and Jalgaon (Maharashtra).
There are 457 functional and non-functional airports and airstrips in the country, of which 91 are managed by the Airports Authority of India (AAI) and 125 by the armed forces.
The Rohit Nandan Committee report was further examined by global consultancy firm Deloitte, whose suggestions form the basis for the policy to bring smaller towns and cities within the air route network in a phased manner, they said.
The committee has suggested that the Ministry devise ways to operationalise 225 airports in the next two decades.
The draft policy proposes that new routes, connecting about 80 Tier-II and Tier-III cities, would be offered in auction to airlines which would have the monopoly to operate on these sectors for two to three years.
The airline, which bids for the least subsidy from the government to run these services on specific routes, would be chosen to fly on the given slots on each route.
To begin with, the airlines bidding for these routes would get a subsidy.
The resources for the subsidy would come from the Essential Air Services Fund, which has already been approved by the Civil Aviation Ministry.
As per estimates, an annual subsidy of about Rs 300 crore (Rs 3 billion) would be needed for the 40 cities approved for the first phase.
The money would be provided through budgetary support as well as a cess on passengers flying on major metro routes, the sources said.
If traffic grows on one of these routes, it would be re- auctioned without a subsidy after the lock-in period, they said.
Small aircraft like turbo-prop ATR-72s would be used in these operations to small cities, which would not only get the benefit of a flat four per cent sales tax on jet fuel, but also minimal landing and parking charges, they said.
The smaller airplanes would typically comprise 40, 60 or 80-seaters which would be able to operate from runways as small as 1,250 metres which could be later expanded to 2,000 metres for larger aircraft.
The new policy is likely to replace the existing Route Dispersal Guidelines which mandate all Indian carriers to deploy one-tenth of their total capacity to 'socially important but financially inviable' routes in the Northeast and Jammu and Kashmir.