Livemint: August 24, 2016
Mumbai: India, the fastest growing aviation market in the world, is set to get 50 new airports in the next three years as part of a plan to boost regional connectivity, and of these, at least 10 will become operational over the next one year, said civil aviation minister Ashok Gajapathi Raju in an interaction with reporters in Mumbai in Tuesday.
The government, he added, will support newer entrants in the aviation space by “light hand-holding”.
To give wings to the ambitious regional connectivity plan, the government will take up some of the so-called ghost airports through a yet-to-be-finalized viability gap funding plan.
India has more than 30 non-operational airports and more than 400 airstrips dating back to World War II.
“It took us some time to roll out the regional connectivity scheme. The idea was to convert the wish list into a work list,” Raju said.
Later in the day, the minister signed a memorandum of agreement for regional connectivity with the Maharashtra government. The state is the first to have done so, chief minister Devendra Fadnavis tweeted.
As part of the plan, some of the existing non-functional airports owned by the Airports Authority of India Ltd in Maharashtra, including Solapur, Jalgaon, Akola, Nanded and Shirdi, will be developed into no-frills airports at an indicative cost of Rs.100 crore, said the minister.
The regional connectivity model will be based on viability gap funding, under which 80% of the cost will be borne by the state government and the rest by the centre. The subsidies will be doled out for a period of three years.
In a series of tweets after the memorandum was signed, Fadnavis said that operations at the Shirdi airport are set to begin from November.
The new civil aviation policy cleared by the Union cabinet on 15 June aims to take flying to the masses. The civil aviation ministry announced a complex regional connectivity policy that seeks to connect unconnected towns. This will be done by capping fares at about Rs.2,500 for these routes and helping airlines with funding. The funds will be generated by charging a cess on other domestic flights.
On whether any airline has come forward, Raju said most of them have made enquiries and are agreeable to the scheme.
“We believe regional connectivity will take off,” said Raju.
Analysts said using existing non-operational airports and airstrips to boost regional connectivity is a positive move.
“It is far more cost-effective than developing new airports ground up. It will also offer a far better catchment area,” said Rahul Gangal, partner at consulting Roland & Berger.
However, the reach has to be backed by operational efficiency of the airlines, he added.
Elaborating on how the government plans to support fledgling airlines such as Air Pegasus and Air Costa that have seen multiple cancellations in the recent past owing to financial woes, Raju said, “We can do light hand-holding the way we did for SpiceJet, but cannot manage their books.”
The airlines will need to pay their current dues and can clear their arrears in instalments, he added.
Commenting on the performance of state-owned Air India Ltd, Raju said, “There are a lot of people who are into Air India passion. I am not among them. We can’t commit taxpayers’ money till eternity. They will have to pull up their socks.”
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.