The government plans to encourage airlines to fly on non-viable routes by lowering user charges at those airports using a system of subsidy funded by the proposed aviation cess on passengers and carriers.
There is also a proposal to increase the charges paid by airlines on busy airports to decongest them. At present, airlines have to deploy a certain percentage of their fleet on smaller routes to be able to fly the lucrative ones.
Civil aviation ministry officials say the proposed model is likely to be a part of the forthcoming civil aviation policy. It is expected to reduce the burden on private airlines considerably.
It will not be mandatory for carriers to operate routes with low occupancy, which will free aircraft for more lucrative routes.
According to domestic aviation companies, the occupancy on non-metro routes is usually less than 50 per cent, against the break-even occupancy of 65 per cent.
The Director General of Civil Aviation divides the airline routes in the country in four categories based on the traffic generated.
Airlines are of the view that Category III routes, which cover the north-east, etc, generated the lowest traffic. The situation is worsened by the government regulation that all airlines must fly these routes, fragmenting the market.
Under the present norms, domestic carriers are required to deploy on Category II routes at least 10 per cent of the number of aircraft they operate on Category I routes.
Similarly, on Category IIA, the airlines have to deploy 10 per cent of what they operate on Category II routes.
On Category III routes, mainly small cities, the airlines are mandated to deploy 50 per cent of the number of aircraft deployed on Category I routes.Click here to search for lowest airfares!
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