Indian carriers may be asked to increase connectivity to remote areas of the country in a move that could raise costs for airlines even as it aims to evenly distribute the growth in domestic air traffic, which crossed the 52 million mark last year.
The aviation ministry is planning to expand the scope of existing route dispersal guidelines for airlines that define a dozen key metro routes in the country based on air traffic. Airlines have to ply at least 10% of their total metro flights on routes covering destinations that are not well connected and are less profitable, such as Jammu and Kashmir, the North-East, Lakshadweep, and the Andaman and Nicobar islands.
“The traffic has increased over the years and there is a case for revising these metro routes. Kochi-Bangalore and Bangalore-Hyderabad are also at par in terms of traffic now,” said a ministry official, who declined to be named. “DGCA (Directorate General of Civil Aviation) is being asked to look into it and rework.”
The regulator defines high-traffic metro routes currently as Mumbai-Bangalore, Kolkata-Delhi, Mumbai-Kolkata, Kolkata-Bangalore, Mumbai-Delhi, Kolkata-Chennai, Mumbai-Hyderabad, Delhi-Bangalore, Mumbai-Chennai, Delhi-Hyderabad, Mumbai-Thiruvananthapuram and Delhi-Chennai.
If, for example, Kochi-Bangalore and Hyderabad-Bangalore are added to this list, the number of flights that airlines ply on less profitable routes will simultaneously increase.
Civil aviation secretary Nasim Zaidi wants the definition to be widened to cover such routes, the ministry official said.
In 2009, DGCA had banned national airlines from buying seat-miles from so-called regional carriers to meet regulatory requirements, as Mint reported on 24 April. Wadia Group’s low-fare carrier GoAir bought seats from Gurgaon-based MDLR Airlines Pvt. Ltd in 2008 when it was unable to meet route dispersal requirements as it was focused on just flying metro routes then.
Most national airlines such as GoAir prefer these metro routes, which offer better passenger traffic and yields, besides helping to save costs as aircraft maintenance facilities need not be based at multiple airports.
Any move to widen the metro route definition is likely to force all airlines to rework their schedules in line with the new guidelines, which are likely to come up for consultation soon.
An official with a domestic carrier confirmed that the matter has been discussed with airlines, but called it illogical and against the recommendations of the Naresh Chandra panel report of 2003 on the aviation sector.
The report, available on the aviation ministry website, had recommended that “route dispersal guidelines should be abolished” and airlines should be allowed to service the routes of their choice, based on commercial considerations.
It had also recommended that “the government should provide explicit subsidy support—preferably from the general exchequer and supplemented by a sector-specific cess of 5% on airfare and proceeds from the privatization of airports—for providing essential, but uneconomical services, and award it through a system of minimum subsidy bidding”.
The creation of a non-lapsable essential air services fund was an ideal solution for this, it said. None of these recommendations have been applied so far.
“Where there is no demand on Kolkata-Silchar, they want you to put jumbos. You are forcing the industry to become sick,” said the airline official. There are other constraints at such low-traffic destinations, he said.
In Srinagar, for example, where the number of daily flights have increased drastically through the years, this official pointed out there are no night-landing facilities, leaving little scope for additional flights to take off or land after sunset.