AAI to partially fund RCS

The Airports Authority of India (AAI) will partially fund the government's regional connectivity scheme (RCS) and contribute Rs 200 crore from its dividend this fiscal, Civil Aviation Secretary R N Choubey today said.
He was speaking at an event held to award 325 routes to 15 airline and helicopter operators under second round of RCS.
"AAI has to pay dividend to the GoI, which goes into the exchequer. On our request in this year, FM has allowed us to retain Rs 200 crore for current year's requirement to be retained and transf directly by AAI to RCS fund which will meet our requirement fully," Choubey said at a media briefing.

The secretary added that AAI will contribute Rs 500 crore from its dividends in the next fiscal.
The move will ensure that there is no extra burden caused to airlines and passengers, he explained.
According to the scheme, also known as UDAN (Ude Desh ka Aam Aadmi), the government aims to connect tier-2 and tier-3 cities and awards viability gap funding to airlines and helicopter operators to keep the fares low and make flying affordable for the masses.

The RCS fund was so far being collected through a levy of Rs 5,000 being imposed on domestic flights on key routes and the proceeds from this is estimated to be Rs 200 crore annually.

However, there has been a shortfall in collecting this and until December 2017 the government received approximately Rs 70 crore.
With the number of operators and routes increasing substantially in this round of RCS as compared to the earlier one, the ministry of civil aviation needed additional funds.
According to the provisions of the scheme, AAI also offers certain concession to RCS flights like free landing and parking charges. Terminal navigation landing charges (TNLC) and route navigation and facilitation charges (RNFC) will be levied by AAI on a discounted basis.
Chairman, AAI, Guruprasad Mohapatra an interview to PTI had earlier said that while these concessions extended by it "will impact AAI" but it is a win-win situation as RCS routes turn profitable over a period of time.

"This will impact AAI. However, as the operations increase,it will be a win-win situation for AAI. Once the route develops over a period of time the route will come out of ambit of RCS and will definitely prove to be a source of revenue for AAI through collection of usual charges as at other airports," Mohapatra said.