New route dispersal norms to take wings
The government is considering an overhaul of the route dispersal guidelines (RDG) that mandate airlines to fly unviable routes connecting cities in the north-eastern region, Jammu & Kashmir, Andaman & Nicobar Islands and Lakshadweep. The review may involve re-categorisation of 25-odd cities, changing the geographical spread of the RDG. Domestic airlines have been seeking relief in terms of the amount of mandatory flying required to meet the guidelines.
The ministry of civil aviation set the ball rolling in the direction last week by asking domestic airlines to give their viewpoint on the revised route dispersal guidelines. Federation of Indian Airlines, the association of airline operators in the country, would be collating the views of the industry and present it before the government.
"We would like to have the airlines’ point of view before revisiting the guidelines," said a senior official in the ministry of civil aviation. The basic guidelines were framed back in 1994 and have been tweaked every two-three years by adding more stations or routes to the list.
The RDGs make it mandatory for scheduled airlines to operate a certain number of flights to a particular region. For instance, airlines must operate at least 10 % of their trunk-route capacity deployment - that includes top six metros - on Category II routes that are meant to connect the north-eastern region, Jammu & Kashmir, Andaman & Nicobar Islands and Lakshadweep.
Many airlines feel there is need to move some stations from Category II to Category I. Interestingly, the move comes at a time when the North-East Council is in the process of reviewing the dispersal guidelines for the region.
Ministry officials point out that while the north-east is now better connected by air than even two years ago, many states are feeling the need to improve intra-north-east air connectivity. The council has been mulling over options such as launching a dedicated regional carrier, North-East Airline, for the region.
Current arrangement with Alliance Air for servicing the region comes to an end by December. Following this, the council may even allow other private carriers to bid for flying intra-north-east routes. Some private carriers have even mooted the idea of the N-E council subsidising certain number of seats to ensure viability of flying in the region.
"There is excess capacity in the north-east and current load factors indicate there is not much room for demand to grow," a senior airline executive said. What is causing concern to many operators is that the government is in the process of finalising its policy for promoting regional airlines.
This, some analysts feel, may take the sting out of the current route dispersal policy. Ministry of civil aviation had earlier indicated that government may offer tax sops for encouraging regional airlines in the country. There is already a growing interest from private startups to launch regional airlines.