Govt announces norms for regional airlines

In order to enhance connectivity between tier II and tier III cities, the government today introduced a new policy for regional airlines which will operate primarily between airports of any of the four regions classified as-North, South, West and East with Northeast.

Airports in a particular region will be designated by the Airports Authority of India. Both aircraft and helicopter operators are under the preview of the policy.

All new applicants, awaiting permission, will be preferred for the regional airline licence. "We do not want to give the licence for all India operations now as there is already much congestion at the metros. However, after a few years of operation as a regional airline, the carrier can apply for a second permit for pan-India operations," said a ministry official.

The policy, however, does not offer any special sops to regional carriers. Sops like total exemption from navigation and airport charges, a lower 4% sales tax on aviation turbine fuel (ATF) - are available to both regional and pan-Indian carriers as long as the size of the aircraft used is small (less than 40,000 kg).

Regional airlines will get a scheduled operators licence which is different from the one given to a normal scheduled operator having operations across India. An airline in a particular region will be able to operate from one metro (e.g Delhi for the north region) to all the non-metros in the region. It will also be able to operate in other regions provided it does not operate in a metro.

However, the airlines who have taken a license to operate in the southern region can operate flights between the three metros in the region-Chennai, Bangalore and Hyderabad. The new carriers under the policy also do not have to follow route dispersal guidelines like the pan-Indian scheduled carriers, who have to fly non profitable routes like in the north east.

In order to operate as a regional airline, a carrier has to acquire at least three carriers in the first year and a minimum of five aircraft in the second year. For aircraft with take of mass of 40,000 kg upto three aircraft, an airline has to have a paid up capital of Rs 30 crore. Addition of each aircraft would require additional amount of Rs 10 crore. This will go to a maximum of Rs 50 crore, after which there need be no further enhancement of equity.

Capital for airlines with a take-off mass below 40,000 kg for upto three aircraft would be Rs 12 crore. For further two aircraft a capital of Rs 12 crore will be required.

When asked what additional incentives would be given to the regional airlines, union civil aviation minister Praful Patel said, "This is just the beginning of the policy. Further incentives will be worked out in due course."