The government, on Friday, will unveil the finer details of the Regional Connectivity Scheme (RCS), touted as the centre-piece of the National Civil Aviation Policy approved by the cabinet on June 15.
Through RCS, the government aims to take flying to the masses by making it affordable and convenient. The key highlight of RCS is the capping of fares for flights to unserved airports at Rs 2,500 for a one-hour flight. For this, the aviation ministry plans to impose a Rs 8000 levy per domestic departure on flights on all trunk routes.
Government hopes to raise Rs 500 crore annually through this levy that would be used to fund RCS and subsidise regional flights.
Government hopes that the scheme will help bring many airstrips and airports that have been lying unused for several years on the domestic aviation map. It has already announced plans to develop them as no-frills airports at an indicative cost of Rs 50 crore to Rs100 crore.
Government has said that airports having scheduled commercial flights will increase from 77 in 2016 to 127 by 2019.
The RCS will come into effect in the second quarter of 2016-17, the ministry has said. “This will be implemented by way of Viability Gap Funding (VGF) to airline operators,” said an official.
A Regional Connectivity fund will be created for VGF through a small levy per departure on all domestic flights other than Cat II/ Cat IIA routes and small aircraft below 80 seats.
There would be a demand driven selection of airports for revival, in consultation with state governments and airlines. The RCS will be implemented only in those states which reduce VAT on aviation turbine fuel to 1% or less, provide other support services and 20% of VGF. Concessions will have to be provided by stakeholders and there will no airport charges and service tax on tickets will be reduced (on 10% of the taxable value) for the first one year.
The state governments will have to provide police and fire services free of cost and power, water and other utilities at concessional rates.
India hopes to become the third largest civil aviation market by 2022 from ninth at present. And RCS will play a key role in this, said an official. “The aviation policy aims to increase domestic ticketing from 8 crore in 2015 to 30 crore by 2022,” he said.