NEC may stop funding to Alliance Air from next April

The North Eastern Council (NEC) today said it may stop providing financial assistance to Alliance Air, a subsidiary of Air India, from April next year to help it cope with the losses incurred in providing air connectivity in the region.
"The NEC is likely to discontinue providing the viability gap funding (VGF) that it provides to a air carrier once the Regional Connectivity Scheme (RCS) of the Ministry of Civil Aviation comes into effect from April 1, 2016," NEC advisor P H K Singh said.
The VGF is included as part of RCS in which a traveller has to shell out an average of Rs 2,500 only for flying one hour in the region, Singh said while addressing at the two-day North East Connectivity summit here.

Currently, the NEC is paying Rs 47 crore as VGF to Alliance Air that connects most destinations in the region.
The RCS, which is scheduled to come into effect on April 1 next year, is part of the Revised Draft National Civil Aviation Policy released on October 30.
Meanwhile, NEC secretary Ram Muivah said the Council will continue to provide funding for improvements of facilities at various airports and Rs 220 crore has been sanctioned for different works in six airports.

Muivah said improvement works for airports of Lohit and Dibrugarh has been sanctioned at Rs 79 crore and Rs 56 crore respectively.

The construction of additional hangers in Guwahati airport is being funded at a cost of Rs 32 crore, while the extension of the runway and installation of approach lighting system (ALS) at Shillong airport has been sanctioned at Rs 28 crore, he said.
The improvement works for Imphal airport and another airport at Jorhat is also sanctioned at Rs 14.81 crore and Rs 9.51 crore respectively.
Set up in 1971, the NEC is the nodal agency for the economic and social development of the North Eastern Region comprising eight states -- Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura.