The scheme was launched by the Ministry of Civil Aviation for regional airport development and regional connectivity enhancement.
It is a part of the National Civil Aviation Policy 2016.
The scheme is applicable for a period of 10 years.
Objectives:
Improve the air connectivity to remote and regional areas of India.
Development of remote areas and enhancing trade and commerce and tourism expansion.
Enable common people to access air travel with affordable rates.
Employment creation in the aviation sector.
Under the scheme, airlines have to cap airfares for 50% of the total seats at Rs. 2,500 per hour of flight.
A financial stimulus in the form of concessions from Central and State governments and airport operators and
Viability Gap Funding (VGF) – A government grant provided to the airlines to bridge the gap between the cost of operations and expected revenue.
Regional Connectivity Fund (RCF) was created to meet the viability gap funding requirements under the scheme.
The partner State Governments (other than UTs and NER states where contribution will be 10%) would contribute a 20% share to this fund.
Current Status
A total of 225 routes have ceased operations under a government support scheme.
Out of these, 128 routes shut down before completing the mandatory three-year period under the scheme.
Airlines found 70 of these routes to be commercially unviable despite receiving subsidies.
The remaining 58 routes were cancelled due to reasons such as non-compliance by the airline operator, airlines surrendering routes, or airline companies shutting down.
Additionally, 97 routes shut down after completing the three-year period during which the government provided support.
The objective of the scheme was to enable airlines to sustain operations on their own after the three-year period without government support.
However, out of the 155 routes that completed the three-year period, only 58 routes have managed to survive without government assistance.
COMMENTS