In July of this year, in continuation of the reforms in aviation sector, the government announced the draft Regional Connectivity Scheme (RCS). It has been in public domain since then and the Ministry of Civil Aviation (MoCA) had sought suggestions/objections to the draft and the last date for submission was September 26. The Ministry must be deliberating upon the inputs that may have come and is likely to announce the RCS soon which will radically transform regional aviation in India.

The Ministry notification of August 26 dwells on Regional Air Connectivity Fund and the contributions that are likely to be made by the Central Government and beneficiary State Governments. The notification states that the expression ‘Regional Air Connectivity’ shall mean operation of an air transport service between any two airports in India of which at least one has been declared by the Central Government as ‘unserved’ or ‘underserved’.

RCS Airport

As per the scheme an ‘RCS Airport’ shall mean any airport (whether under the ownership of the Airports Authority of India (AAI), State Governments, private entities or the Ministry of Defence, Government of India) licensed/approved by the Directorate General of Civil Aviation (DGCA), for which the State Government and airport owner/operator have notified concessions as specified under the National Civil Aviation Policy (NCAP) 2016.

It has defined an ‘RCS Heliport’ as that which is a designated area for landing and take-off of helicopter(s) (whether under the ownership of the AAI, State Governments, private entities or the Ministry of Defence, Government of India) licensed/approved by the DGCA, for which the State Government and heliport operator have notified concessions as specified under NCAP 2016. As for ‘RCS Route’ it has defined that to mean an identified pair of origin & destination airports/heliports within India sought to be connected pursuant to the Scheme, satisfying all of the following conditions: (a) at least one of the origin or destination points is either an RCS Airport satisfying the definition of underserved airport or unserved airport; or an RCS Heliport. The condition is that there have been no scheduled commercial flights on such a route for the last two flight schedules as approved by the DGCA, provided that in the case of proposed helicopter operations, there have been no commercial operations, whether scheduled or nonscheduled, on such a route for the last one year; (b) the stage length (as per flight path approved by DGCA) between the origin and destination airport/heliports is not less than 200 km and not more than 800 km, provided that, for remote areas: (1) hilly terrains of Jammu and Kashmir, Himachal Pradesh, Uttarakhand and North Eastern Region of India, (2) Andaman and Nicobar Islands and Lakshadweep Islands, and (3) areas with security concerns as determined by the Ministry of Home Affairs; and for operations through helicopters, route with stage lengths less than 200 km between the origin and destination airports/heliports shall also be eligible to be considered as RCS Routes.

THE MINISTRY HAS LISTED OUT 410 AIRPORTS/AIRSTRIPS IN TWO CATEGORIES, WITH 394 ‘UNSERVED’ AND 16 ‘UNDERSERVED’. THE SCHEME WILL BE APPLICABLE WITH RESPECT TO RCS AIRPORTS/RCS HELIPORTS.

The RCS has defined an ‘underserved Airport’ as that airport which is not an unserved Airport and at which, at the time of application by an airline operator for operating an RCS Flight under the Scheme, there are no more than seven scheduled commercial flights per week as per the latest flight schedule approved by the DGCA. And an ‘unserved Airport’ is that airport which, at the time of application by an airline operator for operating an RCS Flight under the Scheme, there have been no scheduled commercial flights during the last two flight schedules approved by the DGCA.

410 Airports/Airstrips Identified

The Ministry has listed out 410 airports/airstrips in the above two categories, with 394 ‘unserved’ and 16 ‘underserved’. The scheme will be applicable with respect to RCS Airports/RCS Heliports.

At any time, the list of RCS Airports/RCS Heliports under the Scheme—as finalised in consultation with State Governments, will be published for information of stakeholders. In case any airline operator wishes to connect an airport/heliport that is not an RCS Airport/RCS Heliport, it shall be required to approach the Implementing Agency and submit an expression of interest based on which the Implementing Agency will then approach the concerned agencies for confirmation of concessions specified under the Scheme. In case any such airport is a defence airport, the approval from the Ministry of Defence, Government of India will need to be obtained for permitting joint use/civil operations under the Scheme.

In case any rehabilitation/upgradation of infrastructure is required at such airports to make them operational/suitable for proposed RCS Flights operations, the same can be undertaken by AAI upon reimbursement of appropriate costs of such rehabilitation/upgradation works from respective State Government/airport operator. In such cases, the ownership and operatorship of such airport(s) will continue with the State Government/airport operator.

RCF Allocation for Underserved Airports

To promote connectivity to un-served airports, proposals connecting underserved airports will be approved such that only up to 30 per cent of the estimated inflows in the RCF can be committed to such proposals. For the purpose of the above determination, a proposal for an RCS Route connecting an unserved Airport to an underserved Airport shall be considered as a proposal connecting unserved airports, and a proposal for an RCS Route connecting an underserved airport to an underserved airport or any other airport, which is not an unserved Airport, shall be considered as a proposal connecting underserved airports.

The fund allocation shall be applicable for a period of one year from the date of announcement of the Scheme or till this provision is reviewed whichever is earlier.

Brazil Too Expanding Regional Network

From the scheme, it is quite obvious that the government is making all efforts to boost regional and remote area connectivity. It is highly commendable. The way forward for developing economies is regional connectivity. One other economy that is doing something similar is Brazil which has done well on regional connections, despite being a developing economy like ours. Brazilian Government has announced an investment plan of $3.6 billion to develop 270 regional airports over the next few years. The investments will be made to promote the improvement, modernisation, reform and expansion of airport infrastructure including reform and construction of runways, improvements in passenger terminals, expansion of patios, revitalisation of signaling and pavement, among others. The funds come from the National Civil Aviation Fund and procurement will be made through public tender process.

In spite of national budget constraints, the federal government of Brazil is working to accelerate its regional airport concession plan. As many as 11 cities are to be privatised and another six cities in the states of Bahia, Minas Gerais and Goiás are also to go the private way. According to a local newspaper, about 75 cities have environmental permits and are awaiting approvals. In São Paulo itself the government is coming up with tenders for five regional airport concessions. The airports are Antônio Ribeiro Noronha Jr. in the city of Itanhaém; Gastão Madeira in Ubatuba; Comandante Rolim Adolfo Amaro (Jundiaí); Campo dos Amarais (Campinas), and Arthur Siqueira (Bragança Paulista). The financial modelling of the concession of these five airports in São Paulo estimate yearly revenues for the future concessionaires in the amount of $8 million, with 88 per cent coming from non-tariff (or complementary) revenues. The request for tenders draft provides for a 30-year concession period, allowing the participation of investment and pension funds, individually or in consortium.

The writing is on the wall. The next wave of aviation development is going to come from regional and remote connectivity and emerging economies have started understanding its import.