MoU between Alliance Air and North-East Council to Improve Air Connectivity in North-East

Alliance Air, the wholly owned subsidiary of Air India, signed here an MoU with the North East Council (NEC) for flight operations in the North East under Viability Gap Funding (VGF).

Under this MoU, Alliance Air will provide air services to Shillong, Tezpur, Lilabari, Silchar and Guwahati with ATR 42 type of aircraft till 31st March, 2016. The operation is under Viability Gap Funding (VGF) arrangement. North East Council (NEC) will assist Alliance Air in obtaining concessions on ATF, landing, RNFC rates etc. The actual cost of operations shall be reviewed every three months based on the proposed cost and VGF amount will be fixed accordingly.

Alliance Air has been operating flights to the North East since January 2003, under Viability Gap Funding (VGF) i.e., Cost minus Revenue formula, to cover losses on the operations in the North East. Alliance Air continued services in the North East upto 31st December 2012 when it was operating 65 flights per week to the North East. However, from January 2013, due to outstanding VGF, the airline restructured its ATR operations in the North East and consequently ATR services were discontinued on some routes. However, Alliance Air continued operations between Kolkata-Silchar, Kolkata-Guwahati and Silchar-Imphal with ATR aircraft. In July 2013, it also restored five times weekly flights on the Kolkata-Shillong route.

Besides the ATR operations, Air India has also been operating flights in the North East region with its Airbus family aircraft between Kolkata and Silchar, Dimapur, Dibrugarh, Aizawl, Imphal, Agartala and Guwahati, apart from Delhi- Guwahati routes.

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