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Business News/ Politics / Policy/  Puducherry agrees to give concessions for regional flights
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Puducherry agrees to give concessions for regional flights

The regional aviation scheme, which would be in operation for 10 years, envisages providing connectivity to unserved and underserved airports

The MoU was signed by junior aviation minister Jayant Sinha, Puducherry chief minister V. Narayanasamy and other officials.Premium
The MoU was signed by junior aviation minister Jayant Sinha, Puducherry chief minister V. Narayanasamy and other officials.

New Delhi: The Puducherry government has agreed to provide concessions for regional flights under a scheme proposed by the civil aviation ministry. The ministry and the state government signed a memorandum of understanding (MOU) on the regional connectivity scheme in New Delhi on Friday.

“With today’s development, the State Government of Puducherry has formally agreed to provide the concessions required from the State Governments in the Regional Connectivity Scheme," the ministry said in a statement.

The MoU was signed by junior aviation minister Jayant Sinha, Puducherry chief minister V. Narayanasamy and other officials.

The regional aviation scheme, which would be in operation for 10 years, envisages providing connectivity to unserved and underserved airports of the country through revival of existing airstrips and airports.

This would be achieved through a financial stimulus in the form of central and state government concessions, as well as Viability Gap Funding for interested airlines to kick-off operations from such airports so that passenger fares are kept affordable.

The fare for a one-hour journey of about 500km on a fixed wing aircraft or a 30-minute journey on a helicopter would be capped at Rs2,500, with proportionate pricing for routes of different lengths and duration.

To reduce the cost of operations, the centre will provide concessions in the form of reduced excise on VAT, service tax and flexibility of code sharing at the RCS airports.

Similarly, the state governments would have to lower the VAT on ATF to 1% or less, besides security and fire services free of cost and electricity, water and other utilities at substantially concessional rates.

Similarly, landing and parking charge and terminal navigation landing charges will not be imposed by the airport operator.

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Published: 01 Oct 2016, 12:04 AM IST
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