If luck has it, air travellers might be blessed with subsidised air tickets for all regional routes. The subsidised rate scheme is being proposed in the National Civil Aviation Policy that is all set to be approved by the Cabinet, according to a report by NDTV. This policy will prove to be a big boost for regional air connectivity.
For instance, an air ticket that costs Rs 3,500 will be sold by the airline for Rs 2,500. The airline will be compensated for its Rs 1,000 loss with the Centre paying 80 per cent (Rs 800) and the state paying 20 per cent (Rs 200).
According to the report, to help fund this regional connectivity scheme, regular traverllers will have to pay two per cent cess on all major domestic and international tickets.
State governments are expected to set up number of no-frills airports, and also provide services like fire brigade, water and security at their own cost. The states will have to reduce VAT to one per cent or less and there will be no service charge on regional flights.
To the opposition from airlines, aviation experts have replied saying that if the airlines were being compensated by the government, then it can control the pricing.
"The rule of the game is very simple. Don't take subsidy and price it (the ticket) the way you like. "...If you take subsidy, you have to go by price the government fixes," Amber Dubey, Head, Aviation KPMG, was quoted in the report.
This plan, however, will succeed only if state governments agree to convert hundreds of unused airstrips into no-frills airports where these flights can operate.