AAI mulling discounts to airlines for connecting small towns

Flights from airports in small towns are likely to be a cost-saving proposition for airlines, with the Airports Authority of India (AAI) planning to offer discounts on landing and parking charges to any carrrier connecting such destinations.

Airlines like even the start-up carrier AirAsia India could avail of such discounts if they start operating from small towns and cities, where new airports have come up or the existing ones upgraded, in order to build traffic potential there, official sources said here.

AAI is considering offering the discounts on a graded basis, say for a period of three years. Such a move would be a major saver for the airlines as landing and parking charges constitute 10-12% of their cost of operations.

As per the present proposal, AAI is offering an airline a 75% discount on landing and parking charges in the first year of operation if enough flights were flown from these non-metro airports, the sources said.

In the second year, this discount could be 50% and 25% in the third year. AAI would start charging full tariff from the fourth year, they said.

These discounts are aimed at promoting regional airports and new routes, the sources said, adding that it takes time to build traffic demand on such routes and destinations.

However, the proposal to offer such discounts would need clearance from the Civil Aviation Ministry, they said.

They gave examples like flights between Bhopal and Jabalpur or from Chennai to Mysore or Puducherry or Vijaywada, or places like Kolhapur, Hubli and Belgaum where existing airports have been upgraded and flights could be operated.

In any case, the sources said that the tariffs charged by AAI were lower than what was being charged by private airport operators.