Alliance Air to strengthen services to Northeast

Aiming at strengthening its services to the Northeast, Alliance Air has sought bids for leasing of three turboprop 70-seater planes for a period of 10-12 years, official sources said today.
The Air India subsidiary would dry-lease these new ATR 72-600 aircraft in all-economy configuration for 10-12 years and wants all of them to be delivered by 2015-16, the sources said. Dry lease is an arrangement to lease an aircraft without the flight crew.
Alliance Air last month resumed flights to five cities in the Northeastern region including Guwahati after the North Eastern Council (NEC) decided to fund the losses in operating these flights.

The other cities to which the flights have been resumed are Shillong, Tezpur, Lilabari and Silchar and the total number of these services stand at 65 per week.
The airline has been operating these flights since January 2003 under the viability gap funding (VGF) system. The services were stalled in 2013 after the NEC did not pay the viability gap funds for these operations which were running in losses, resulting in the airline failing to renew leases and being forced to return the aircraft to the lessor.
A fresh Memorandum of Understanding to resume these operations and continue the flights till March 2016 was signed late last month between Alliance Air and the NEC for resumption of the flights.

Under the MoU, the cost of operations would be reviewed every three months based on the proposed cost and VGF amount would be determined accordingly. VGF is essentially to meet the gap between the cost of operations and the revenue earned from the flights.
NEC would also assist Alliance Air in obtaining concessions on jet fuel, landing, Route Navigation Facility charges and other costs.