New policy on airlines to fly small cities in 3 months


New Delhi, Jan 3: A new policy to encourage airlines to fly to smaller cities and make regional air connectivity commercially viable is likely to be ready in the next three months.
 "The Civil Aviation Ministry is coming up with a new route dispersal policy to establish better air connectivity to small cities, which would include various measures to encourage airlines to begin operations to such places," Civil Aviation Minister Ajit Singh said here Wednesday.
 A consultant, hired to prepare a draft of the policy to promote regional air connectivity, will submit its report by January 31, this year.
 "We hope to be able to have some policy in place in about two months after this report is submitted. The idea is to make these (flying) operations more commercially viable," the Minister said during an informal interaction with reporters.
 Noting that the existing route dispersal guidelines which make it mandatory for airlines to fly to North eastern states, J&K and Andaman & Nicobar Islands had many loopholes, he said while these loopholes would be plugged, it is unlikely that the existing sops provided to airlines to improve regional connectivity would be done away with.
 "We want airlines to fly to small cities. We know that operating an airline is a costly affair. So they want to have only one type of aircraft as it reduces the operational costs. Hence, they need to be encouraged to also acquire smaller planes to fly to Tier-II and Tier-III cities," Singh said.
 The new policy would provide ways to cross-subsidise these operations by the airlines flying to such destinations.
 To promote regional connectivity, the present rules stipulate that airlines operating small aircraft like turboprops, with seating capacity up to 70 passengers, are provided jet fuel at a uniform rate of sales tax of four per cent.
 Taxes on the fuel otherwise range from four to 30 per cent across different states. The high sales tax rates and high domestic cost of jet fuel leads to fuel costs accounting for 40-45 per cent of the total operating cost of airlines.
 Having jet fuel supplied at a flat rate of four per cent tax would be "a big fiscal incentive for airlines", Singh said.
 Asked about spurt in airfares after grounding of operations by Kingfisher Airlines, the Minister said this was not only the reason behind this hike as airlines still have a load factor of 70-79 per cent.
 "Fares have gone up because of imposition of service tax, high cost of aviation turbine fuel and decrease in business travel due to downturn. Indian airlines are not yet making any operational profits," he said.
 He said the Ministry would soon establish a monitoring mechanism to make the pricing more transparent and find out ways to make the fares reasonable.
 This mechanism would be in addition to the airfare monitoring cell functioning at the Directorate General of Civil Aviation.

Lastupdate on : Thu, 3 Jan 2013 21:30:00 Makkah time
Lastupdate on : Thu, 3 Jan 2013 18:30:00 GMT
Lastupdate on : Fri, 4 Jan 2013 00:00:00 IST

  • StumbleUpon
  • Digg
  • TwitThis
  • Mixx
  • Technorati
  • Facebook
  • NewsVine
  • Reddit
  • Google
  • LinkedIn
  • YahooMyWeb
  • Print News

Enter the Security code exactly as you see it in the image security code is CaSe SeNsItIvE(Cookies must be enabled)

  • Kashmir

SHAME: 7th grade student drugged, raped in Shopian



Shopian, Jan 3: A 13 year old girl in this South Kashmir district has accused a youth of abducting, drugging and later raping her. The shocking incident, according to the family members occurred about More

  • Srinagar City




Srinagar, Jan 3: What Police did to me on Thursday at Hazratbal on Srinagar outskirts is my testimony of brutality that I went through. It was a nightmare when the men-in-uniform, who are meant to protect More

  • Jammu

NC committed to equitable development of JK: Rana


Jammu Jan 3: Chief Minister’s Political Advisor Devender Singh Rana on Wednesday said that the four years of the Omar led coalition government had ushered the state in an era of peace, progress and prosperity More

  • South Asia

Mobile phone services blocked in Pakistan


Islamabad, Jan 3: Pakistan today blocked cellular services in over 50 towns and cities, including Islamabad, to prevent terror attacks on processions. Officials of the Interior Ministry have contended More

  • Court Watch

High Court issues notice to CS, Commissioner Secy Health



Srinagar, Jan 3: Disapproving of government’s “tardy approach” of making placement against the post of Director Health Services Kashmir on substantive basis, Jammu and Kashmir High Court has granted three More

  • Tangmarg

TANGMARG: Old transmission lines pose threat to lives,lead to power shortage


Tangmarg, Jan 3: Many villages receiving electricity from Kunzar-grid here in north Kashmir are facing acute power shortage due to deterioration of the transmission infrastructure.  Residents of Bongam More

Designed Developed and Maintaned By Imobisoft Ltd /Algosol Software Solutions