Monday, September 15, 2014

Indian Airlines Oppose Regional Connectivity Plan


A plan by India's transport ministry to allow charter companies to fly scheduled service to low-traffic routes has raised the ire of the airline industry.
September 15, 2014, 12:32 PM
Indian domestic airlines have voiced opposition to a Ministry of Civil Aviation (MOCA) draft policy on regional and remote connectivity that permits nonscheduled (charter) companies to fly regular service to remote destinations under code-share arrangements with scheduled carriers. Under India’s Route Dispersal Guidelines, domestic airlines must to fly 10 percent of their capacity to identified underserved areas.
In a meeting called by MOCA to debate the draft policy, airlines plan to suggest establishing a regional connectivity fund in line with international practice. The plan would involve charging every passenger a fee, used for subsidizing airline operations for flights to 87 destinations mentioned under the guidelines clause.
The Business Aviation Operators Association (BAOA) has recommended that regulators change the current definition of nonscheduled operators to scheduled commuter airlines for those who propose to operate with an approved timetable. “We have recommended state governments to provide facilities, including security; that is a big cost to operators in codeshare…The major challenge is to release the policy,” said BAOA secretary R.K Bali.
Airlines, however, worry about additional administrative and competitive burdens. “Why should airlines open up routes for somebody and open up additional competition?” an airline official told AIN. “For us [the cost of operating the route] will be the same, but with a bigger mess of administration to deal with.”
Meanwhile, even as the government has announced plans to build five new “budget” airports, more than five regional airlines await their Air Operators Permit. The draft policy gives them the option to convert themselves into national scheduled airlines within three years. “This is hara-kiri given that the market is not growing fast,” a full-service airline official told AIN. “This is obvious in the fare wars on, even during the peak season.” 

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