Regional air services

Following the Madhya Pradesh model, the Gujarat government has offered to subsidize the private players who are interested in providing regional air services in the state. Well-placed Sachivalaya sources said, the model was first adopted in the neigbouring state recently, where the government offered to pay for three seats on an average for 16-seater small turbo prop aircrafts taking flights between selected spots, including Bhopal, Gwalior, Indore and Khajuraho. 
“Earlier efforts to rope in private players failed to materialize because the private players found the cost of running short-distance flights too costly. This time, we have decided to subsidize the private players, though slightly changing the formula adopted by the Madhya Pradesh government. Under the formula, the government will be paying for specified seats per flight under 
a complex calculation which includes distance and the flight route”, a senior official said. 
Tenders to run regional air services in Gujarat have been floated. Preliminary discussions ahead of the tenders suggest that the interested parties include Air One, Akash Ganga, SpiceJet, Ventura, Deccan Charter and Luan Airways. “We will select only those who agree to get lowest amount of viability gap funding from the state government”, the official said, adding, “Once finalized, the selected parties will carry out their own feasibility study 
and work out ticket fare.” 
The official said that the state government has set aside a "token amount of Rs 10 crore" as subsidy to the private players wanting to ply aircraft within Gujarat's selected cities. "In Madhya Pradesh, for the six routes they have selected, it is Rs 1.5 crore subsidy per month against three seats. In Gujarat, much would depend on the selection of routes by the private parties. But the subsidy would be about the same on an average for the eight spots that we have offered", the official added. 

There are two types of tenders – offshore and onshore. Offshore tenders require nine-seater amphibian planes which can land in dams, in rivers in lakes and even on runways, and these will be purely tourist ventures. “For this, only foreign parties will be interested, but they will have to come with a foreign partner. These planes can land off Dwarka, in the sea, for instance, or off Somnath, or even in the Narmada dam reservoir”, the official said. 
As for the onshore tender, these can attract businessmen. “The selected spots that have been offered are Surat, Ahmedabad, Vadodara, Bhavnagar, Rajkot, Porbandar, Deesa and Kandla. While the government may subsidize flights between any of these places, the selected parties will be free to extend the flights to, for instance, Diu, Jamnagar, Mandvi, Mundra, Amreli, even Mumbai and Delhi. We expect diamond merchants to use the flights to and from Surat to Saurashtra areas”, the official said.

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