The Airports Authority of India (AAI) has received 45 initial bids from 11 parties to fly routes under the Regional Connectivity Scheme (RCS) launched by the Union Ministry of Civil Aviation.
The initial bid proposals covers more than 200 routes and as many as 65 airports, 52 of them not served by any airline and 13 under-served airports. Now, Government has invited counter-bids against these initial proposals.
After that, these routes will be awarded to bidders who quote the lowest Viability Gap Funding (VGF) requirement against the routes under the RCS.
About Regional Connectivity Scheme (RCS)
- The RCS aims to boost air travel in Tier II and Tier III cities by capping fares at Rs 2,500 per one hour flight. The AAI is the implementing authority of the scheme.
- Its objective is to make flying affordable for the masses, to promote tourism, increase employment and promote balanced regional growth.
- As per the scheme, the Union Government will subsidise the losses incurred by airlines flying out of dormant airports to allow airlines to charge Rs. 2,500 for an hour’s flight to passengers.
- About 80% of the subsidy will be collected by charging a levy of up to Rs. 8,500 on each departing flight of domestic airlines and the rest 20% will come from the respective state governments.