State govts lining up sops to attract airlines

At least a dozen Indian states are offering financial concessions and infrastructural facilities to airlines to step up air connectivity in their cities.

These states are considering reduction in sales taxes and offering soft loans to airlines as compensation for servicing far-flung areas that were previously not part of air networks. Linking small cities is often financially unviable for a scheduled carrier. Some of the states are also upgrading airstrips to potentially handle small planes.


Consulting firms such as Infrastructure Leasing & Financial Services Ltd (IL&FS), Infrastructure Development Finance Co. Ltd (IDFC) and Feedback Ventures Pvt. Ltd are assisting some of the state governments in wooing airlines as well as in upgrading airports.

The Uttarakhand government, for instance, has invited expression of interest from airline operators having valid licences for operating commercial flights in the state.

IL&FS is also currently working on similar projects for Rajasthan and Gujarat.
Feedback Ventures had earlier assisted the Karnataka government to develop airports at various places including Hassan, Shimoga, Bijapur, Raichur and Gulbarga, as a preliminary step to boost air connectivity.

The Kerala government is also formulating concessions for airlines to increase the connectivity within the state as well as flights to other states.

The north-eastern states of Meghalaya, Assam, Tripura, Mizoram, Manipur, Nagaland and Arunachal Pradesh have also invited airline operators to increase routes in their states.

14/09/07 P.R. Sanjai/Livemint