There is so much promise with regard to the growth of the hinterland, both in terms of passenger and cargo movement. The government is giving sops for airlines and with infrastructure soon in place the next big aviation wave will be from the hinterland which is waiting to be connected.

Transportation infrastructure, be it surface, sea or air, has been an area of concern in India. That many towns and villages have not been properly networked is a fact that we continue to live with. Only of late, there has been some movement as “the powers that be” have started realising its importance as a catalyst for growth.

In this realisation, the Ministry of Civil Aviation recently announced a strategic plan—to create world class infrastructure facilities; establish regulatory framework in consonance with international standards; connect un-served and under-served areas; develop skilled manpower according to the needs of the industry; and deploy advanced technologies for the optimal growth of the sector.

From this stated policy, the plan of connecting un-served and under-served areas and deploying advanced technologies for regional aviation’s optimal growth assumes significance as there is a clamour on making the regional aviation regime more airline-friendly. A sizeable chunk of the population has remained ‘unconnected’ or ‘disconnected’ due to the cityskewed policies. Less than two per cent of Indians fly annually. That spells enormous opportunities as well as the challenges.

With the low-cost carrier model having taken off, regional aviation is waiting in the wings, albeit for quite a while. In 2008, the government announced a regional aviation policy and several players showed intent of operating regional airlines. They included MDLR, Jagson Airlines, Star Aviation, Zav Air, Mega Airways and Premier Airlines. Recently, lowcost carrier SpiceJet announced that it would soon launch its regional services with Hyderabad most likely as its hub. SpiceJet has ordered 15 Bombardier Q400 turboprop aircraft with a seat configuration of 70 to 80.

SpiceJet will be the first Indian airline to operate these modern turboprop aircraft from Canadian manufacturer Bombardier. Until now, Air India, Jet Airways and Kingfisher Airlines have all used the Franco-Italian ATR turboprops. Bombardier regional jets are used by JetLite and Air India Regional.

As per the Directorate General of Civil Aviation (DGCA), Gurgaon-based MDLR Airlines with two 70-seat Avro146-170 was registered as a regional airline in 2008. While there is a regional airline policy in place, decision-makers are only waking up now on the need to create an infrastructure conducive for their operations. One of them is airport modernisation and the Airports Authority of India (AAI) has embarked upon modernisation of 35 airports across the country, which when complete will have networked air infrastructure to a reasonable level.

Concessions for regional airlines

Though India is supposed to be having 449 airports/airstrips including 28 civil enclaves at defence airfields, the operational ones are less then 100 with many not having proper runways and other infrastructure. And in civil enclaves, flight timings are restricted to be between sunrise and sunset, an issue which needs to be addressed.

The government is keen on encouraging development of regional airlines based on small aircraft to provide airlinkages in the interior areas of the country. Regional hubs, the government indicated, will have to act as operational bases for regional airlines and also have all the facilities currently postulated for model airports, including the capability to handle limited international traffic.

The policy allows exemption from all airport and navigation charges for regional carriers that fly small aircraft (below 40,000 kg) and payment of concessional tax of four per cent on fuel against 35 to 36 per cent for national carriers. Regional airlines can start operations with only one aircraft (instead of five) and equity of Rs. 12 crore, instead of Rs. 50 crore. Regional airlines are permitted to operate flights only to or from one city (except in the south, where they can operate between Hyderabad, Chennai and Bangalore). Regional airline aspiration is to connect III and II tier cities with the major cities.

Kapil Kaul, CEO (Indian subcontinent), Centre for Asia Pacific Aviation (CAPA), has said, “Traffic growth has only just begun between large and small cities. Between the small cities, it is yet to begin in a major way, which means that at least for now, there is no viable market for regional airlines in regions apart from the south.”

Such encouraging trends are happening in other parts of the world too. China for instance has revised its regional aviation policy. Guo Qing, Vice President, Marketing, Embraer China has said that Embraer is ‘very optimistic’ about the future development of China’s domestic regional aviation market, especially in the country’s underdeveloped regions.

Embraer jets will soon be flying in more numbers after China decided to scrap airport construction fees for domestic short-haul flights beginning this year, aimed at boosting the aviation market in the country’s economically less-developed areas, especially the central and western regions. The exemption on fees included eight models of regional aircraft, including Embraer’s regional jet (ERJ) series, covering 844 routes that connect 129 Chinese airports.