Government to promote small regional carriers

After low-cost carriers, it is now the turn of regional airlines to spread their wings. In a bid to improve air connectivity to the hinterland, the government is finalising a policy to promote airlines that operate only in a particular region. Under the policy, a regional airline, flying aircraft with not more than 80 seats, will be exempted from navigation and airport charges. This concession will be available only for airlines that restrict their operations to one region rather than establishing a nation-wide network. Civil aviation ministry has carved out four regions — north, east, west and south — for marking geographical limits, sticking to which will be mandatory for availing the exemption from airport charges. The government is also planning to extend concessional sales tax rate of 4% for all regional aircraft. Currently, the benefit is available only to turboprop aircraft and others have to bear high sales tax of up to 26% in some states.

Airlines keen on availing the ‘regional’ benefit have to operate on a distinct licence. If an existing airline wants to start a regional carrier, it will have to obtain a new licence. The policy on regional airlines will be put in place in a few months, civil aviation ministry sources said. The move will help projects meant to connect small sectors that now do not have air connectivity. MDLR airlines, floated by a Haryana-based real estate developer Gopal Kumar Goyal, plans to focus exclusively on religious places of north India. Initially, the benefits under the policy will be given to carriers with fleet size of less than 80-seater aircraft. As the policy on regional airline evolves, all eligible carriers will be given these incentives, the official said. The Directorate General of Civil Aviation will be notifying fleet strength and infrastructure requirements for regional airlines. Civil aviation ministry will also be talking to state governments to provide incentives to fuel the growth of such airlines, the source added.

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