The civil aviation ministry plans to develop 50 low-cost airports in two years to supplement its proposed regional connectivity scheme.
“We are targeting the revival of at least 50 airports in the first two years (of implementation of the scheme) subject to state government support and interest shown by airlines,” said civil aviation secretary R N Choubey in New Delhi on Friday.
The Airports Authority of India manages 125 airports and scheduled commercial airlines operate from 75 of them.
“There are 30 AAI airports readily available for operation without any upgradation,” Choubey said.
“There are 200 airstrips owned by state governments, which can be operationalised. We need to identify the viable airstrips,” said an official.
The Centre has proposed a scheme to incentivise airlines to fly on regional routes. The Union government will provide viability-gap funding to airlines to cover the cost of operations on such routes, through a reverse bidding process, provided they charge ~2,500 per passenger for an hour’s flight.
The scheme will be applicable on regional airports the Centre will build after identifying airstrips where airlines are keen to fly.
“On a particular route, if there is a demand from more than one operator, we will resort, in all likelihood, to reverse bidding. The airline asking for the least amount of funding will be the one to get it. Where only one party is interested, we will have to do normative costing, and based on that, we will decide the subsidy required,” said Choubey.
The Centre is yet to decide a formula to calculate normative costs. Choubey said a detailed document on regional connectivity would be framed by the government and circulated among states and other stakeholders to invite expressions of interest.
“There is no compulsion on airlines to cap the fares at Rs 2,500. If they find that on their own they meet their cost, there is no compulsion to charge Rs 2,500,” Choubey said.
“If the operators do not get the type of passengers they want, they won’t operate. This is the reason we have targeted (fares at) Rs 2,500 per hour,” he said.
“What the state governments had mostly done was to underwrite or guarantee certain number of seats on regional routes. Learning from this experience, we decided that instead of seat guarantees and leaving ticket pricing free, it is better to bring fares within affordable limits and provide an incentive to fly,” he added.
The Centre will provide subsidy to states through a regional connectivity fund by charging a 2 per cent cess on domestic and international tickets. The Centre will contribute 80 per cent from this fund and the rest will come from states.
