The regional air connectivity scheme launched in April 2017 for 10 years will get government support for 10 more years
A major upgrade of infrastructure and warehousing for cargo, including for high-value perishable horticulture produce, has been proposed in the Budget
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.
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.
Key Features:
Under the scheme, airlines have to cap airfares for 50% of the total seats at Rs. 2,500 per hour of flight.
This would be achieved through:
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.
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