Budget 2013: MoCA seeks subsidy for airlines flying to remote locations
Jan 25 2013, 22:11 | By CNBC-TV18
Ministry of Civil Aviation has demanded some funds to provide subsidies to airlines that fly to remote locations in this Budget itself, reports CNBC-TV18's Sumit Jha.
This is a part of ministry's drive to improve connectivity to remote locations. Ministry sources say that there is reluctance on part of some airlines to fly to these locations. That is because of historically low yield which ultimately decides the profitability of these airlines.
They have struggled to cover their costs. So, with some sort of subsidy to these airlines ministry hopes that more flights and frequency would improve to these locations. More airlines will queue up to fly to these locations.
Ministry sources also say that states will also be asked and be roped in to provide subsidies in some form or the other. Most likely it will be by cutting down sales tax on jet fuel, which is exorbitantly high in some of the states.
If this demand does go through in this budget, we are likely to see an improved connectivity. Then there will be more flights and possibly lower airfares to places like, Andaman and Nicobar Islands, northeast and places of religious significance like Allahabad and Varanasi.
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