Logistics

NAL feels time is ripe to inject funds into its 70-90 seater aircraft

Ashwini Phadnis New Delhi | Updated on January 16, 2018

Project to get a boost with the new civil aviation policy and Make in India thrust

The Bengaluru-based National Aerospace Laboratories’ (NAL) efforts to make a 70-90 seater aircraft in India has got a new impetus with the emphasis that the new civil aviation policy lays on enhancing regional air connectivity and the Modi government’s emphasis on ‘Make in India’.

NAL has already done the paper design and other analysis for the creation of such an aircraft. However, the project was shelved about three years ago because the government declined its request for close to ₹9,000 crore for the project to be brought to fruition.

When asked whether this was the right time to pump in funds into this project, Jitendra Jadhav, Director, NAL, told BusinessLine that he thought so as the new civil aviation policy is looking to revive 550 air fields. The aircraft that NAL is developing will be a short take-off aircraft which should be able to land on many of these airfields.



Regional connectivity

“The new civil aviation policy is talking about regional connectivity. Rather than having a foreign aircraft, we can have a private partnership with some foreign partner and NAL’s design which will be a good Make in India. NAL is good in design. We need a manufacturing partner,” he added .

Senior NAL officials told BusinessLine that if the funds were sanctioned, the project could become a reality by 2023. “We are targeting connectivity between 250 and 500-600 km. The efficiency of turbo prop aircraft allows for short distance flying for which you really do not need to fly very high,” Jadhav pointed out when asked as to why NAL was looking at a turbo prop aircraft and limiting it to 70-90 seats.

In July this year, the government unveiled its ambitious regional connectivity scheme which will cap airfares at ₹2,500 for one-hour flights to unserved and under-served airports that are 476-500 km apart.

Flying between airports that are 776-800 km apart will cost ₹4,070, while travelling between metros will be a tad more expensive.



Viability gap funding

The government’s proposal includes providing Viability Gap Funding for fixed wing aircraft flights covering 200-500 km provided at least nine seats are priced at an all-inclusive fare of ₹2,500.

The government will provide the operator a viability gap funding of ₹3,750 per seat sold under the regional connectivity scheme (RCS) up to a maximum of 40 seats per flight. The VGF has been capped at ₹4,170 for 776-800-km.

To be eligible for the VGF, an operator will have to operate regular services to at least one airport which at present does not have regular flights.



Published on September 19, 2016

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