Madhya Pradesh is the only State in India which provides subsidy to an airline operating regional flights, and now other State may follow suit soon. The Civil Aviation Ministry wants the States to underwrite a fixed number of seats per flight operated by local airlines to boost intra-State connectivity.
“We have told the States that regional connectivity cannot be achieved without States pushing for it. They have been asked to study the MP model to ensure smaller cities in their respective States get air connectivity,” a Ministry official said.
The Madhya Pradesh Government provides financial backing to airline company Ventura Airconnect, which connects cities including Bhopal, Gwalior, Indore, Jabalpur, Satna, Khajuraho and Rewa.
The State Government underwrites three seats on each sector, reimburses VAT on the fuel uplifted from any city within the State, provides free security for operations to airstrips owned and operated by the State Government, and offers marketing support by MP State Tourism Development Corporation.
The ministry official informed that the State Government paid an average Rs4,402 per seat subsidy towards underwritten seats and Rs1.49 crore towards VAT reimbursement to the private operator in the past three years that it has implemented the scheme.
The State Government has sought concession in landing, parking and air traffic control charges from the Airports Authority of India for the first five years of operations to make the assistance viable.
The provincial government subsidises operations of Ventura Airconnect, which says on its website that it is the first intrastate airline in the country and operates in Madhya Pradesh and Gujarat.
According to a message on the website by the airline’s chairman Pradeep Agarwal, the carrier has operated 8,000 flights with 35,000 passengers since it commenced operations in Madhya Pradesh in 2011.