Through subsidies and other incentives, EASF will create a much-needed impetus for the development of infrastructure and growth in the regional aviation sector, writes Umesh Kumar Baveja.
The Essential Air Services Fund (EASF) is a programme for IndiaÂ’s regional air infrastructure and services. Among the sweeping changes currently being made in the civil aviation sector in India, EASF will create a much-needed impetus for
the development of infrastructure and growth in the regional aviation sector.
Initially, recommended by the Naresh Chandra Committee in 2003, EASF will provide direct subsidy to build low-cost airports and encourage domestic airlines to fly on remote and interior routes, thus making remote parts of the country more accessible. The plan to implement the fund comes at a time when the aviation industry is at an all time low due to fewer aircraft in the sky leading to extremely high airfares. In this situation, commercial airlines are unable and unwilling to provide services to smaller cities due to losses accumulated in these sectors, as well as unpreÂdictable demand.
At present, seven scheduled passenger airlines in India with a combined fleet of 400 aircraft carry about 54 million passengers every year, which constitutes less than 5 per cent of the Indian population. However, more than 80 per cent of this traffic is between metro airports. With disposable income on the rise across the country, more people are willing to fly, provided infrastructure is adequately developed. According to projections, domestic air traffic by scheduled carriers in India in 2020-21 is set to cross 159 million passengers as against 54 million in 2010-11, suggesting a three-fold growth in 10 years. The opportunity for growth is tremendous – but this will amount to nothing if the infrastructure is not in place.
Our company has helped state governments and the Ministry of Civil Aviation in creating a definitive policy for regional aviation. This policy, once in force, would be the basis of an effective EASF – both for planning and disbursement. The
need for airlines to fly to these cities to make our investment viable is a real concern that has to be addressed in coordinaÂtion with the government and operators of commercial airlines.
A case in point is the subsidy on offer by the governments of Madhya Pradesh, Maharashtra and Gujarat. Both have given subsidies to small aircraft operators for intra-state flight operations to connect tier-II/ tier-III cities with tier-I cities. This is helping boost the economy of these regions by providing quick and easy accessibility to the people around these areas. These subsidies are similar to the EASF model and are likely to be clubbed under it once the Fund is formalised.
EASF would not only be a catalyst in the creation of aviation and related infrastructure, it would also improve the quality of life for people living in those remote areas, increase their ability to do business and help develop the local economy.
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