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New Delhi issues draft policy for international route subsidies

The Indian government may extend its Regional Connectivity Scheme (RCS) to international destinations, particularly in Southeast Asia, as it looks to improve international air connectivity.

In a draft policy issued by New Delhi, the plan termed as International Air Connectivity Scheme (IAC) calls for subsidised airfares that will initially connect Guwahati in the Northeastern state of Assam to Dhaka, Kathmandu, Yangon, Kuala Lumpur, Singapore and Bangkok, as well as Vijayawada in the Southeastern state of Andhra Pradesh to Singapore and Dubai.

Under the IAC, subsidies are calculated based on the unsold number of passenger seats on the proposed aircraft to be deployed. Nonetheless, the ministry of civil aviation acknowledges that different aircraft types may be operated for the same stage lengths and have different operational costs.

Airlines with winning bids for specific routes will also have an exclusive subsidy period of three years and are required to operate IAC flights with a mimimum frequency of three-weekly and a maximum frequency of daily services.

"Certain state governments of India felt that facilitating [and] stimulating international air connectivity would be desirable from a public policy perspective and may need financial support, at least in the initial period, to trigger participation of airlines. Such state governments desire to have direct scheduled flights between their respective states and select international destinations to promote socio-economic growth," says New Delhi.

Interested stakeholders have until 4 September to comment on the IAC draft policy.

New Delhi had earlier bandied the idea at this year's Wings Air air show in Hyderabad, with the state of Assam offering an annual concession of Rs1 billion ($15 million) for three years to international airlines to serve Guwahati airport.

FlightGlobal schedules data shows that Guwahati airport is primarily a domestic airport, with Bhutan's Druk Air operating a Paro-Guwahati-Bangkok route.

Launched in 2017, the RCS offers subsidies for routes linking tier two and three cities in India.

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