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Assam plans to subsidise airfares to Southeast Asia

The modalities of the programme are still being worked out, but are likely to be similar to those of the Modi government’s regional connectivity scheme called UDAN

, ET Bureau|
Jan 16, 2018, 07.11 AM IST
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Under UDAN, airlines offer services to small Indian cities and towns at a fare of Rs 2,500 for per hour of flight.
NEW DELHI: Travelling to Southeast Asia is likely to get cheaper for those who are ready to fly out of Guwahati, as Assam has made a proposal to subsidise the airfare.

The central government is working on a request from Assam chief minister Sarbananda Sonowal to launch a subsidy programme for air travel between the state’s largest city and destinations in Southeast Asia, aviation secretary RN Choubey said.

Assam has offered to foot the subsidy bill to the extent of Rs 100 crore annually for three years, as it stands to benefit from higher economic activity that an international travel hub would bring with it.

The modalities of the programme are still being worked out, but are likely to be similar to those of the Modi government’s regional connectivity scheme called UDAN, which seeks to make flying accessible to the common man. The scheme is likely to be restricted to local airlines, but open to both Indian and foreign nationals.

“The request for the scheme came from the chief minister of Assam, who wants to develop Guwahati as the hub for flights to Southeast Asia,” Choubey told ET. “We have started work on it and are sending a proposal to the Assam government.”

Details of the scheme will be finalised after receiving a formal confirmation from the state, Choubey said. “However, it will be broadly based on the principle of lowest subsidy — the bidder who quotes the lowest amount of viability gap funding will be declared the winner,” he added.

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Assam chief secretary VK Pipersenia didn’t replay to a text message seeking comment or respond to a telephone call. Under UDAN, airlines offer services to small Indian cities and towns at a fare of Rs 2,500 for per hour of flight. To make the services viable, the government supports the carriers financially through viability gap funding (VGF).

Chief minister Sonowal is keen to develop air services in the state, which could act as a gateway for international tourists and other travellers, especially from Southeast Asia, to the Northeast as well as the rest of India.

Assam has approached the central government to work out the scheme as the state doesn’t have the expertise to bid out routes. Analysts said such a scheme would help transform the region if it was made attractive enough.

“Good to see state governments giving emphasis to regional air connectivity,” said Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG.

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